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December 5, 2016

After ICP Challenges TIAA-Everbank, Fed's 3d Round of Qs, CRA Included

By Matthew R. Lee

NEW YORK, November 29 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - down to People's United Bank now trying to buy Suffolk County National Bank while barely lending to people of color in New York. 

  Then there are cross-industry proposals like TIAA's attempt to acquire Everbank of Florida, which Inner City Press / Fair Finance Watch on October 29 challenged, and attempts from overseas to buy Genworth.

The Federal Reserve has asked a third round of questions of TIAA, which we publish here in full, including one on CRA:

"In connection with the request for the Board’s prior approval pursuant to section 10(e)(1)(A)(iii) of the Home Owners’ Loan Act, as amended, 12 U.S.C. 1467a(e)(1)(A)(iii), and 12 CFR 238.11(e) by TIAA Board of Overseers, Teachers Insurance and Annuity Association of America (“TIAA”), and TCT Holdings, Inc., each of New York, New York, to acquire control of EverBank Financial Corp., a savings and loan holding company, and EverBank, a federal stock savings association, both of Jacksonville, Florida, the following information is requested. Supporting documentation should be provided as appropriate.

1. If the transaction is consummated as proposed, describe in detail any authority that the New York Department of Financial Services (“DFS”) or any other regulatory entity (apart from the Federal Reserve Board) may have to:

a. Prevent TIAA from down streaming funds or otherwise acting as a source of financial strength to a subsidiary, including a subsidiary depository institution;

b. Directly or indirectly prevent the Surviving Intermediate HoldCo (as that term is defined and used in the application) from down streaming funds or otherwise serving as a source of financial strength to the resultant subsidiary depository institution;

c. Directly or indirectly require Surviving Intermediate HoldCo to dividend or otherwise distribute funds to TIAA; or

d. Directly or indirectly require a subsidiary depository institution to dividend or otherwise distribute funds to TIAA. For each of the scenarios described above, include a detailed discussion of the circumstances in which the regulator could exercise such authority, and include citations as appropriate.

2. Indicate any dollar amount or percentage thresholds or limitations on transactions that TIAA may conduct with a subsidiary or affiliate, including with the Surviving Intermediate HoldCo, without prior approval of DFS, and provide any statutory or regulatory authority that addresses this limitation.

3. To the extent not previously disclosed in the application, and to the extent known with respect to EverBank, discuss any pending or recently resolved litigation with or investigations by regulators, including, but not limited to, those pertaining to consumer protection laws and regulations, against TIAA-CREF Trust Company, FSB (“TIAA FSB”) or EverBank.

4. Clarify the extent to which the consumer compliance, fair lending compliance, and Community Reinvestment Act programs of the resultant depository institution will consist of the current programs of TIAA FSB or EverBank. Discuss any aspects of these programs that differ from those currently in place at TIAA FSB or EverBank."

Earlier, some of TIAA's answers were provided to Inner City Press on November 10 and are published here (here and embedded below in full)

"We are grateful for this opportunity to respond to the comment letter filed by Inner City Press  /Fair Finance Watch on 29 October 2016 (the “Comment Letter”), regarding the application submitted by TCT Holdings, Inc., Teachers Insurance and Annuity Association of America (“TIAA”)... The Comment Letter makes a series of assertions regarding the lending practices of TIAA-CREF Trust Company, FSB (“TIAA FSB”) and EverBank by referencing certain Home Mortgage Disclosure Act (“HMDA”) data for 2015. It also suggests that TIAA does not satisfy the requisite managerial standards consistent with approval. Finally, the Comment Letter requests an extension of the public comment period and a public hearing on the Application...

EverBank has advised the Applicants that it has carefully evaluated and investigated the allegations and it has provided the Applicants with information following its manual review of each of the eight declined applications underlying the data cited in the Comment Letter...

The commenter also suggests that allegations in a dated news article that TIAA has engaged in improper business practices in Brazil should be considered by the Federal Reserve Board as a factor when considering the managerial resources of the Applicants. The news article cited in the Comment Letter does not provide a complete or accurate portrayal of how TIAA conducts business in Brazil and other markets... TIAA is a signatory to the U.N. Principles for Responsible Investment."

  Ah, the United Nations... We'll have more on this.

November 28, 2016

Inner City Press has just filed: "This is a FOIA request for the entirety of the November 22, 2016 submission in connection with the Application by TIAA et al to acquire EverBank. As provided under the FRB's ex parte rules, the submission refers to “confidential” exhibits the withholding of which we are challenging with this FOIA request for, for example, “Please see Confidential Exhibit 7 for an explanation of the uncommitted $300 million credit line;” “the Resultant Institution will continue to satisfy the QTL test under prong (iv), as demonstrated in Confidential Exhibit 2;”" etc...

November 21, 2016

Of BOK, the Fed said last week of ICP's comment, " a commenter objected to the proposal on the basis of alleged disparities in the number of residential real estate loans made to minority borrowers, as compared to white borrowers, by BOK Bank in the Kansas City, Missouri-Kansas, Metropolitan Statistical Area (“Kansas City MSA”); the Houston, Texas, MSA (“Houston MSA”); and the Phoenix, Arizona, MSA (“Phoenix MSA”), as reflected in data reported under the Home Mortgage Disclosure Act (“HMDA”) for 2014.25 The
commenter further alleged that BOK Bank confined African American and Hispanic borrowers to government loan programs instead of conventional loan products in the
Kansas City MSA. Also, the commenter criticized the rate at which BOK Bank denied applications by African Americans and/or Hispanics, compared to the rate of denials for
whites, for home refinance loans in the Houston and Phoenix MSAs, as reported under HMDA for 2014. In addition, the commenter generally alleged that BOK Bank has a
weak record of lending to people of color and low-income individuals and a weak record of consumer compliance."

And we maintain that - and note the Fed accepting that "On September 9, 2016, the Securities and Exchange Commission (“SEC”) announced that it had settled charges against BOK regarding allegations that BOK Bank’s Corporate Trust Department, primarily through a senior executive, concealed problems and red flags from investors in certain bond offerings for which BOK Bank served as indenture trustee and dissemination agent between 2007 and 2015. See BOK Bank, SEC Order Instituting Cease-and-Desist Proceedings, File No. 3-17533 (September 9, 2016)"

November 14, 2016

After ICP Challenges TIAA-Everbank, Defense of Lending, Land Grabs

By Matthew R. Lee

NEW YORK, November 10 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - down to People's United Bank now trying to buy Suffolk County National Bank while barely lending to people of color in New York. 

  Then there are cross-industry proposals like TIAA's attempt to acquire Everbank of Florida, which Inner City Press / Fair Finance Watch on October 29 challenged, and attempts from overseas to buy Genworth.

The Federal Reserve has asked questions of TIAA, some of whose answers were provided to Inner City Press on November 10 and are published here (here and embedded below in full)

"We are grateful for this opportunity to respond to the comment letter filed by Inner City Press  /Fair Finance Watch on 29 October 2016 (the “Comment Letter”), regarding the application submitted by TCT Holdings, Inc., Teachers Insurance and Annuity Association of America (“TIAA”)... The Comment Letter makes a series of assertions regarding the lending practices of TIAA-CREF Trust Company, FSB (“TIAA FSB”) and EverBank by referencing certain Home Mortgage Disclosure Act (“HMDA”) data for 2015. It also suggests that TIAA does not satisfy the requisite managerial standards consistent with approval. Finally, the Comment Letter requests an extension of the public comment period and a public hearing on the Application...

EverBank has advised the Applicants that it has carefully evaluated and investigated the allegations and it has provided the Applicants with information following its manual review of each of the eight declined applications underlying the data cited in the Comment Letter...

The commenter also suggests that allegations in a dated news article that TIAA has engaged in improper business practices in Brazil should be considered by the Federal Reserve Board as a factor when considering the managerial resources of the Applicants. The news article cited in the Comment Letter does not provide a complete or accurate portrayal of how TIAA conducts business in Brazil and other markets... TIAA is a signatory to the U.N. Principles for Responsible Investment."

  Ah, the United Nations... We'll have more on this.

After ICP Challenges TIAA-Everbank, Here's TIAA's Defense to Federal Reserve of Lending Disparities, Land G... by Matthew Russell Lee on Scribd

November 7, 2016

After ICP Challenges People's United Bank's Suffolk Bid, Fed Asks 13 More Questions

By Matthew R. Lee

NEW YORK, October 31 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - down to People's United Bank now trying to buy Suffolk County National Bank while barely lending to people of color in New York.  Inner City Press / Fair Finance Watch on August 13 challenged this application and People's United, as it did Bancorp South in 2014, which led to redlining charges by the Department of Justice and Consumer Financial Protection Bureau.

Now the Federal Reserve, as released to Inner City Press on October 31, has asked People's United a series of questions, including for Community Reinvestment Act information from 2013, 2014, 2015 and 2016 year to date, it's (lack of) lending to African Americans and small businesses, its claims about  RBS Citizens Bank branches and restrictions imposed in connection with the still only proposed - and opposed - merger. We'll have more on this.

And on this: People's United Bank, if allowed to acquire Suffolk National Bank, would layoff at least 76 workers, according to a Worker Adjustment and Retraining Notification under the WARN Act, to the NYS Dep't of Labor....

October 31, 2016

Challenge to TIAA's Attempt To Buy Everbank, Citing Landgrab in Brazil

By Matthew R. Lee

NEW YORK, October 29 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - down to People's United Bank now trying to buy Suffolk County National Bank while barely lending to people of color in New York. 

  Then there are cross-industry proposals like TIAA's attempt to acquire Everbank of Florida, which Inner City Press / Fair Finance Watch on October 29 has challenged. Inner City Press / Fair Finance Watch has written to the Federal Reserve:

On behalf of Inner City Press/Fair Finance Watch (ICP), this is a timely first comment opposing and requesting public hearings and an extension of the FRB's public comment period on the Applications of TCT Holdings Inc., Teachers Insurance and Annuity Association of America and TIAA Board of Overseers, all of New York, New York; to acquire EverBank Financial Corp and thereby indirectly acquire EverBank. This first comment is timely.

This is in essence a proposal for a major cross-industry acquisition, in which TIAA (accused among other things of land grabs in Brazil, see below), which has limited experience in banking and a limited and highly disparate record in mortgage lending, seeks to acquire the largest Florida-based bank, with its own issues. Public hearings are needed.

In the St. Louis MSA, TIAA-CREF Trust in 2015, the most recent year for which Home Mortgage Disclosure Act data is available, reported data but lent only to whites.

Meanwhile Everbank, in the Miami MSA in 2015 for home mortgage loans in HMDA Table 4-1 had a 77% denial rate for African Americans, versus a 36% denial rate for whites. In Tampa for Table 4-1 it had a 100% denial rate for African Americans. Public hearings are required.

For the record, under the Managerial Resources and integrity factors, consider this:

TIAA-CREF, U.S. Investment Giant, Accused of Land Grabs in Brazil NOV. 16, 2015

SÃO PAULO, Brazil — As an American investment giant that manages the retirement savings of millions of university administrators, public school teachers and others, TIAA-CREF prides itself on upholding socially responsible values, even celebrating its role in drafting United Nations principles for buying farmland that promote transparency, environmental sustainability and respect for land rights.

But documents show that TIAA-CREF’s forays into the Brazilian agricultural frontier may have gone in another direction.

The American financial giant and its Brazilian partners have plowed hundreds of millions of dollars into farmland deals in the cerrado, a huge region on the edge of the Amazon rain forest where wooded savannas are being razed to make way for agricultural expansion, fueling environmental concerns.

In a labyrinthine endeavor, the American financial group and its partners amassed vast new holdings of farmland despite a move by Brazil’s government in 2010 to effectively ban such large-scale deals by foreigners.”

For obvious reasons anticipating regulatory push-back against this proposal, TIAA got a clause to withdraw if too much questions are asked or restrictions proposed.

What is the public benefit? The fact that TIAA is run by a former FRB vice chairman militates even more strongly for the requested public hearings."

October 24, 2016

Lending Discrimination Kills Mergers as BancorpSouth Withdraws, ICP Proceeds on People's United

By Matthew R. Lee

NEW YORK, October 22 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - down to People's United Bank now trying to buy Suffolk County National Bank while barely lending to people of color in New York.  Inner City Press / Fair Finance Watch on August 13 challenged this application and People's United, as it did BancorpSouth in 2014, which led to redlining charges by the Department of Justice and Consumer Financial Protection Bureau.

After BancorpSouth settled the redlining charges, Inner City Press / Fair Finance Watch immediately wrote to the Federal Reserve urging that its pending merger applications be denied or withdrawn. Now the latter has happened. The Fed has informed Inner City Press of the formal withdrawal of BancorpSouth's application; we've published the letter here, and will stay on this, to December 2017, as long as it takes.

As to People's United, using the just-released 2015 Home Mortgage Disclosure Act data. Inner City Press has now commented to the Federal Reserve:

 "in 2015 in the New York City MSA, People's United made 110 home purchase loans to whites and only ONE to an African American and only four to Latinos...  In 2015, for refinance loans in the New York City MSA, People's United made 103 loans to whites, only five to African Americans and only two to Hispanics.

   People's United record is scarcely better on Long Island, where it snapped up Bank of Smithtown and Citizen's Bank as it now proposes to do to Suffolk County National Bank. In 2015 for home purchase loans on Long Island People's United made 49 home purchase loans to whites, only four to African Americans and only four to Latinos. For refinance loans it mad 70 loans to whties, only one to an African American and only four to Latinos. Again, this is systematic redlining; this proposed acquisition could not legitimately be approved and People's United should be referred for prosecution for redlining by the Department of Justice and CFPB."

  Responding to ICP and NCRC, People's claims that acquiring another suburban bank would improve this disparate record in New York City. How?

October 17, 2016

ICP Challenges FNB's Reach into the Carolinas for Yadkin Bank, Disparities in Baltimore & Ohio, Insiders

By Matthew R. Lee

NEW YORK, October 15 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - down to FNB / First National Bank of Pennsylvania now trying to buy Yadkin Bank in the Carolinas while barely lending to people of color in Baltimore, Cleveland or Akron.

 Inner City Press / Fair Finance Watch on October 15 challenged this application and FNB, as it did Bancorp South in 2014, which led to redlining charges by the Department of Justice and Consumer Financial Protection Bureau.

Using the just-released 2015 Home Mortgage Disclosure Act data, Inner City Press has commented to the Federal Reserve in Washington and Cleveland:

 "On behalf of Inner City Press/Fair Finance Watch (ICP), this is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Application of F.N.B. Corporation to acquire Yadkin Financial and Yadkin Bank. This first comment is timely.

F.N.B. Corporation's lead bank, First National Bank of PA, has a disparate record of lending, for example in the Baltimore and Cleveland MSAs, below. Yadkin is an amalgam of banks slapped together by private equity investors, who would be the primary beneficiaries of this proposed deal. But what is the public benefit?

In the Baltimore MSA in 2015, the most recent year for which Home Mortgage Disclosure Act data is publicly available and not taken into account in any FNB CRA example, FNB made 86 home purchase loans to whites and only 3 to African Americans, only two to Latinos. This is inconsistent with the demographics of Baltimore, to put it mildly. FNB's denial rate for African Americans was 2.75 times higher than for whites; it was 3.13 times higher than for whites. This is redlining; this proposed acquisition could not legitimately be approved and FNB should be referred for prosecution for redlining by the Department of Justice and CFPB.

People's United record is scarcely better in the Cleveland MSA, another out-of-Pennsylvania market that would be a predictor of how FNB would (under) perform in the Carolinas. In the Cleveland MSA in 2015, FNB made 297 home purchase loans to whites and only 12 to Africans and only 3 to Latinos, applications from which it denied 4.13 times more frequently than whites.

In the Akron, Ohio MSA in 2015, FNB made 41 home purchase loans to whites, only one to an African American (in Table 4-1) and none to Latinos.

In this context, the comment period should be extended so that public evidentiary hearings can be held, and the application should be denied.

Please also note for the record: “Using Tuesday’s closing price on the NYSE, here’s how much more the top 10 individual backers’ stakes will be worth at close, according to FactSet Research:

Adam Abram, lead independent director: $14,298,826.15

Michael Patterson, director: $6,969,354.35

Scott Custer, CEO: $3,836,876.80

Harry Spell, board member: $3,453,074.25

Joseph Towell, chairman: $2,705,434.65

David Brody, board member: $1,645,403.35

Steven Lerner, board member: $1,311,405.15

Steven Jones, chief banking officer: $1,285,450.00

Barry Dodson, board member: $1,117,767.15

Terry Earley, CFO: $1,030,739.45

Insiders currently own about 12 percent of Yadkin, with the bulk, at 67 percent, owned by institutional investors.”

See also:

"The prominent level of private-equity ownership in the Raleigh bank had many analysts and financial experts convinced that it would be sold sooner than later, even though Yadkin just completed on March 1 its $456 million purchase of Greensboro-based NewBridge Bancorp. NewBridge went on a three-bank buying spree after securing $56 million in new private-equity capital in November 2012.

Meanwhile, Yadkin gained $45 million in private-equity capital in October 2012 and subsequently bought VantageSouth Bancshares Inc. of Raleigh and NewBridge. Those private-equity infused deals provided Yadkin with a sufficient branch coverage of North Carolina’s three urban areas to convince FNB Corp. executives to leapfrog over Virginia to make its $1.4 billion offer.

Stone Point Capital LLC, LY Holdings LLC and Lightyear Capital LLC each own 4.46 percent of Yadkin’s 50.84 million outstanding shares. Stone Point and Lightyear were provided with a representative on Yadkin’s board of directors. At $27.35 a share, the sale could be worth $61.2 million for each firm.”

This is a proposal driven by these private equity investors: but what is the public benefit?
 

October 10, 2016

After ICP Challenges Its Suffolk Bid, People's United 2015 Data Even Worse

By Matthew R. Lee

NEW YORK, October 5 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - down to People's United Bank now trying to buy Suffolk County National Bank while barely lending to people of color in New York.  Inner City Press / Fair Finance Watch on August 13 challenged this application and People's United, as it did Bancorp South in 2014, which led to redlining charges by the Department of Justice and Consumer Financial Protection Bureau.

This is even more true upon review of the just-released 2015 Home Mortgage Disclosure Act data. Inner City Press has now commented to the Federal Reserve:

 "in 2015 in the New York City MSA, People's United made 110 home purchase loans to whites and only ONE to an African American and only four to Latinos...  In 2015, for refinance loans in the New York City MSA, People's United made 103 loans to whites, only five to African Americans and only two to Hispanics.

   People's United record is scarcely better on Long Island, where it snapped up Bank of Smithtown and Citizen's Bank as it now proposes to do to Suffolk County National Bank. In 2015 for home purchase loans on Long Island People's United made 49 home purchase loans to whites, only four to African Americans and only four to Latinos. For refinance loans it mad 70 loans to whties, only one to an African American and only four to Latinos. Again, this is systematic redlining; this proposed acquisition could not legitimately be approved and People's United should be referred for prosecution for redlining by the Department of Justice and CFPB."

  Responding to ICP and NCRC, People's claims that acquiring another suburban bank would improve this disparate record in New York City. How?
 
 And the Federal Reserve calls this "untimely"??

October 3, 2016

The Fed on September 30 said, "Of the 42 proposals withdrawn in the first half of 2016, 20 proposals were withdrawn at the initiative of the applicant. The remainder were withdrawn after consultation with staff for technical or procedural reasons or because the proposals raised significant issues regarding the statutory factors that must be considered by the Federal Reserve. Specifically, 13 of these proposals raised financial and managerial issues as well as regulatory compliance and CRA and fair lending issues."

  So what about BancorpSouth? Or a Spanish bank down the pike?The Fed on September 30 said, "Of the 42 proposals withdrawn in the first half of 2016, 20 proposals were withdrawn at the initiative of the applicant. The remainder were withdrawn after consultation with staff for technical or procedural reasons or because the proposals raised significant issues regarding the statutory factors that must be considered by the Federal Reserve. Specifically, 13 of these proposals raised financial and managerial issues as well as regulatory compliance and CRA and fair lending issues."

  So what about BancorpSouth? Or a Spanish bank down the pike?

 The Federal Reserve has responded to Inner City Press' FOIA request about BNC - but has, tellingly, redacted everything about "Enforcement Actions." We are not convinced.

September 26, 2016

And now more questions from the Fed to BNC:

"on Bank of North Carolina, Thomasville, North Carolina (“BNC Bank”), to acquire High Point Bank Corporation (“HPBC”), parent of High Point Bank and Trust Company (“High Point Bank”), both of High Point, North Carolina, pursuant to section 3(a)(5) of the Bank Holding Company Act of 1956, as amended (“BHC Act”), the following additional information, including the information in the confidential appendix, is requested. Supporting documentation should be provided as appropriate.
1. Given BNC’s rapid expansion, describe in detail BNC’s merger and acquisition processes for targeting, acquiring, and integrating acquired businesses. Include the level of board and senior management oversight and reporting, due diligence activities, audit coverage, and the involvement of risk control groups as appropriate.
2. Describe how BNC governs significant project activities and whether there is an independent oversight function that oversees project changes that occur when BNC makes an acquisition.
3. Regarding BNC’s current enterprise risk management, respond to the following:
a. Discuss the impact that the integration of Southcoast has had to BNC’s risk management framework.
b. Indicate whether risk reporting includes information regarding integration activities. If so, describe how this information could be used by senior management to allocate the necessary resources to address integration concerns, should any arise.
c. Describe how BNC’s risk management framework would change upon consummation of the proposed transaction.
4. Provide a pro forma list of shareholders who will own, control, or hold with the power to vote 5 percent or more of the voting shares of BNC upon consummation of the proposed transaction. 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 ownership on both a fully diluted and on an individually diluted basis. Aggregate the interests of any related shareholders."September 19, 2016

So Bank of Oklahoma, after Inner City Press' protest, was asked by the OCC in what markets it will improve. It has now named cities in six states. But will the Federal Reserve even take note of this? Watch this site.

September 12, 2016

The Fed wrote to ICP: "Please see the attached letter and non-confidential enclosure submitted to the Federal Reserve by BancorpSouth, Inc., Tupelo, Mississippi, as additional information related to its applications to acquire, through merger, Ouachita Bancshares Corporation, Monroe, Louisiana, and Central Community Corporation, Temple, Texas.  This information is being provided to you in accordance with the Federal Reserve’s policies on ex parte communications."

ICP replied: "We contest whether some of the withheld information is not subject to the ex parte rules / exempt from disclosure under FOIA" - and after being so directed, filed a FOIA request. Watch this site....

September 5, 2016

Now Bank of New Carolina has acknowledged to the Fed being below average in fair lending in, for example, Charleston - but then cites to still-withheld Compliance Plan and Supplement. This is a scam.


August 29, 2016

ICP Protested BNC - High Point, Now Fed Asks Questions, Here

By Matthew R. Lee

NEW YORK, August 24 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - down to Bank of North Carolina (BNC), whose proposed acquisition of High Point Bank Corporation Inner City Press has challenged and the Federal Reserve has asked questions on, and BancorpSouth, which Inner City Press protested for discrimination in 2014, and has now been charged by the Department of Justice and CFPB.

On the evening of August 24, the Federal Reserve asked BNC questions about Inner City Press' protest, including:

"The public comment submitted on the proposed merger includes assertions that Home Mortgage Disclosure Act data from several metropolitan areas indicate that both BNC Bank and High Point Bank had unfavorable levels of mortgage lending to African American and Hispanic individuals as compared to white individuals.

-Directly address the assertions of unfavorable levels of mortgage lending to those population segments identified by the commenter in each relevant geographic area referenced in the comments;

-Discuss in detail the outreach and marketing activities by BNC Bank and High Point Bank, including any contemplated changes to those activities after consummation of the proposal; and

-Describe in detail the fair lending risk management policies and procedures of BNC Bank and High Point Bank, including any contemplated changes to these policies and procedures after consummation of the proposal...

 Discuss any plans to open, close, or consolidate any bank branches in connection with the proposal, or separately from the proposal, particularly in low- and moderate-income (“LMI”) areas. To the extent that any branches in LMI areas would be closed, discuss management’s plans to mitigate the impact of such closures on the affected communities."

On BNC, Inner City Press / 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)."

  We'll have more on this.

August 22, 2016

How inattentive is the Fed? Well in its end of the week Form H2A listing pending application, it simply jammed five applications, not in alphabetical order, at the top. But this same Fed takes Goldman Sachs' telephone calls on Sunday, to expedite its applications...

 
August 15, 2016

Citing Redlining, ICP Challenges People's United Bid For Suffolk County National Bank

By Matthew R. Lee

NEW YORK, August 8 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - down to People's United Bank now trying to buy Suffolk County National Bank while barely lending to people of color in New York.  Inner City Press / Fair Finance Watch has now challenged this application and People's United, as it did Bancorp South in 2014, which led to redlining charges by the Department of Justice and Consumer Financial Protection Bureau.

  Inner City Press / Fair Finance Watch has filed with the US Office of the Comptroller of the Currency:

"a timely first comment opposing and requesting an extension of the OCC's public comment period on the Application by People's United to buy The Suffolk County National Bank of Riverhead, NY. The newspaper notice says the comment period runs at least through August 16; this comment is timely.

People's United proposes to buy Suffolk County National Bank and its 27 branches in New York. But in the the New York City MSA in 2014, the most recent year for which Home Mortgage Disclosure Act data is publicly available, People's United made 82 home purchase loans to whites and NONE to African Americans or Latinos. This is redlining; this proposed acquisition could not legitimately be approved and People's United should be referred for prosecution for redlining by the Department of Justice and CFPB.

For refinance loans in the New York City MSA in 2013, People's United made 24 loans to whites, 1 to an African American and four to Hispanics. For home improvement loans in the New York City MSA in 2013, People's United made eight loans to whites, and NONE to African Americans or Latinos.

People's United record is scarcely better on Long Island, where it snapped up Bank of Smithtown and Citizen's Bank as it now proposes to do to Suffolk County National Bank. In the Nassau-Suffolk MSA in 2014, People's United made 48 home purchase loans to whites and NONE to African Americans. For home improvement loans it made 16 loans to whites and NONE to African American or Latinos.

In this context, the comment period should be extended so that public evidentiary hearings can be held, and the application should be denied."

August 8, 2016

After Taking Goldman Sachs Calls on Sunday, Fed Fines It $36M, Denies FOIA

By Matthew R. Lee

NEW YORK, August 3 -- The lack of seriousness in US bank regulation grows from the largest banks like Goldman Sachs - which gets weekend service from the Federal Reserve's top lawyer - down to the Bank of North Carolina, for which it hides the "compliance plan" that ostensibly rebuts Fair Finance Watch.

On August 3 after earlier in the year doling out an approval for Goldman Sachs on GE, the Fed announced it has

"ordered Goldman Sachs Group to pay a $36.3 million civil money penalty for its unauthorized use and disclosure of confidential supervisory information and to implement an enhanced program to ensure the proper use of confidential supervisory information. Additionally, the Board announced that it is instituting enforcement proceedings against Joseph Jiampietro, a former managing director at Goldman Sachs, seeking to impose a fine and permanently bar him from the banking industry."

 Goldman Sachs on January 14, 2016 withheld basic information from the response it was required to send to Inner City Press, see below.

But on March 21, after the Fed was notified of extensive irregularities in its processing of the Goldman Sachs - GE application, the Board hauled off and approved it, saying, in footnote 49, that

"Two commenters express concerns about GS Bank’s use of the Board’s prefiling process, suggesting that commenters could not participate in the resolution of substantive issues raised by the proposal because these issues were resolved before the filing of this application. One of these commenters withdrew its comments in full following its discussions with GS Bank.

 The Federal Reserve has established a prefiling process to provide potential applicants with information about the procedural requirements, such as timing and the applicable forms, associated with a proposal. See SR Letter 12-12. This process also helps to identify information that may be needed in connection with issues that the Board typically considers in connection with a particular type of application or notice, such as
competition or financial stability. The prefiling process is not used, and was not used in this case, to resolve or predetermine the outcome of any substantive issues. As in every case, the substantive issues involved in this case were considered and resolved as part ofthe processing of GS Bank’s formal application. In doing so, the Board considered all public comments on the proposal.

Voting for this action: Chair Yellen, Vice Chairman Fischer, and Governors Tarullo, Powell, and Brainard."

 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.

August 1, 2016

Here is the fraud of US Community Reinvestment Act "enforcement" - detailed challenges are deemed rebutted by "Compliance Plans" a bank submits -- which are then deemed confidential in full, no reasonably segregable information, under FOIA exemption 8. This is from the FDIC this week, but concerns the Federal Reserve:

Dear Mr. Lee:
This is our final response to your July 8, 2016 Freedom of Information Act (FOIA) request for information that you described as follows:
This is a request for the Bank of North Carolina submission to the FDIC in connection with Inner City Press / Fair Finance Watch's CRA protest, referred to
(and relied on) by the Federal Reserve in this order:

"BNC further represents that BNC Bank is committed to continually improving its performance in the Greenville and Charleston MSAs and to meeting the needs of
all members of the communities. BNC notes that the commenter filed similar comments with the FDIC on an application for an unrelated acquisition, which was approved on the condition that BNC Bank develop and submit a supplement to its existing compliance plan that would strengthen the bank’s fair lending compliance program. BNC asserts that the supplement to BNC Bank’s compliance plan, which has been approved by the FDIC and implemented by the
bank, adequately addresses the concerns raised by the commenter on this proposal."

ICP's June 18, 2016 comments on Bank of North Carolina's application to acquire High Point Bank and Trust requested this plan. The FDIC extended the comment period to July 8 - but still, none of the plan has been received. Hence this formalFOIA request (and request for further extension of the BNC - High Point Bank and Trust comment period).

Our records search has been completed, and the record that you requested (Record) was located. We have determined that the Record does not contain any reasonably segregable non-exempt information. Therefore, your FOIA request is being denied.

The Record is exempt from disclosure in its entirety under FOIA Exemptions 4 and 8, 5 U.S.C. §552(b)(4) and (b)(8), and is being withheld in full. Exemption 4 permits the withholding of trade secrets, and confidential or privileged commercial or financial information obtained from a person. Exemption 8 permits the withholding of information contained in, or related to, the examination, operating, or condition reports prepared by, on behalf of, or for the use of the FDIC in its regulation or supervision of financial institutions.
This completes the processing of your request.

 We'll have more on this.

July 25, 2016

In January of this year, Inner City Press submitted a protest to the Federal Reserve to NYCB's application to acquire Astoria, see below. Now on July 20, the Fed has asked NYCB this:

"Based on staff’s review of the current record, the following additional information is requested. Supporting documentation, as appropriate, should be provided.

"In its February 13, 2016, comment on the proposal, Inner City Press/Fair Finance Watch (“ICP”) alleges that New York Community Bank’s and Astoria’s branch patterns disproportionately exclude Upper Manhattan and particularly the Bronx, which ICP states is the most predominately minority and low-income community in the state of New York. Please respond to these allegations. Please provide a copy of the public portion of your response directly to Matthew Lee of ICP. Any information for which you desire confidential treatment should be so labeled and separately bound in accordance with section 261.15 of the Board’s Rules Regarding Availability of Information"

 We'll see - is this like on a recent merger where the Fed withheld its FOIA response until the day before they approved the merger? This is a scam....

July 18, 2016

Wanna get to know you: The Federal Reserve has asked, "Please provide summaries of the existing business activities of BOK (including BOKF, National Association) and MBT (including MBT Bank). Your response should include a description of the geographic areas in which the banking organizations engage in their respective activities and the products and services that each organization currently provides. Regarding BOK, please also include details about the various banking organization acquisitions that BOK has made over the years and the subsequent consolidation of each acquired banking organization into BOKF, National Association."

July 11, 2016

The Fed has asked on Chemical - Talmer this, about branches: "demonstrate that Talmer B&T is using the branch primarily for the business of banking. Your answer should include the following, if

a. Date on which the branch was acquired or opened by Talmer B&T.

b. Explanation for the low branch occupancy percentage at the branch location

c. Description of any plans of Chemical to increase occupancy of the property

d. Description of the revenues and deposits associated with the branch relative

e. Description of any features of the branch that make it a marquee location of

f. Discussion of whether Talmer B&T’s ownership of the property housing


Branches for which information is requested:

? Boardman Financial Center, 724 Boardman-Poland Road, Boardman, Ohio

? Dublin Financial Center, 6033 Perimeter Drive, Dublin, Ohio

? Elyria – Downtown, 200 Middle Avenue, Elyria, Ohio

? Muskegon, 281 Seminole Road, Norton Shores, Michigan

? Port Huron Round, 525 Water Street, Port Huron, Michigan

? Portage, 800 East Milham, Portage, Michigan

? Ravenna Financial Center, 999 East Main Street, Ravenna Ohio"

July 4, 2016

The Fed says Bank of the Ozarks' (or BOTO's) overdraft fees don't have to be considered because the Bank says they changed them after being sued....

June 27, 2016

 After Brexit, the Fed on June 24 announced "The Federal Reserve is carefully monitoring developments in global financial markets, in cooperation with other central banks, following the results of the U.K. referendum on membership in the European Union. The Federal Reserve is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy."

June 20, 2016

And now this: "Huntington seeks to exclude certain collateralized public funds from the competitive assessment that are booked to headquarters offices in two markets, Akron, OH and Canton, OH." Then a bunch of redactions that the Fed must rule on, it cannot require a FOIA request of the type the Fed now leaves unresponded to ...

June 13, 2016

And this from the Fed, under the ex-parte rules:

In connection with the application submitted by Huntington Bancshares Incorporated (“Huntington”), Columbus, to acquire all the voting shares of, and to merge with, FirstMerit Corporation and thereby indirectly acquire FirstMerit Bank, N.A., both of Akron, all of Ohio, pursuant to section 3 of the Bank Holding Company Act of 1956 (“BHC Act”), as amended, the following information is requested. Supporting documentation, as appropriate, should be provided. Further information may be required as staff continues its review of the proposal.

1. As provided in the Introductory Statement and Memorandum on Competitive Considerations, Huntington seeks to exclude certain public funds from the assessment of
competitive considerations in the Akron and Canton, Ohio, banking markets. For the public-fund exclusions sought in each market, provide the dollar amount of the deposits to be excluded that were deposited by public entities located in the respective markets. Show the calculations made to compute the dollar amount, and provide the data used to determine whether a public entity is located inside a banking market (e.g., depositor zip codes).

  Watch this site.

June 6, 2016

Federal Reserve Gives BNC An Approval Based on Secret Compliance Plan - and doesn't call ICP/FFW until the next day

By Matthew R. Lee

NEW YORK, June 2 -- 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, seeking to acquire Southcoast Financial in South Carolina and, after that, High Point Bank & Trust.

On June 2 after a long delay, including delay in providing basic information to Inner City Press, the Federal Reserve approved the Southcoast deal. But the Fed didn't even call ICP/FFW until the next day: it's come to this. The Fed approval over said, "In this case, the Board received comments from a commenter who objects to the proposal on the basis of alleged disparities in the number of conventional home purchase loans made to African Americans and Hispanics, as compared to whites, by BNC Bank."

 Then the Fed says, "BNC further represents that BNC Bank is committed to continually improving its performance in the Greenville and Charleston MSAs and to meeting the needs of all members of the communities. BNC notes that the commenter
filed similar comments with the FDIC on an application for an unrelated acquisition, which was approved on the condition that BNC Bank develop and submit a supplement to its existing compliance plan that would strengthen the bank’s fair lending compliance program. BNC asserts that the supplement to BNC Bank’s compliance plan, which has been approved by the FDIC and implemented by the bank, adequately addresses the concerns raised by the commenter on this proposal."
 
But that's been withheld. We'll have more on this.

 On March 1 the Federal Reserve e-mailed Inner City Press a memo about a meeting it had with BNC Bank's highest executives, under the Fed's rules on Ex Parte contacts, avoiding the fair lending and Community Reinvestment Act issues which Inner City Press has raised. We are publishing the Federal Reserve memo online here.

  But as Inner City Press immediately replied, including to the Fed's Office of the Secretary, why did the Fed wait until March 1 to send a memo of a January 28, 2016 meeting -- more than a month? Does that comply with any meaningful rule on Ex Parte communications? We'll have more on this.

  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.

May 30, 2016

  AGAIN, how can it be, that the Fed has STILL not provided the documents long ago requested under FOIA about Huntington - FirstMerit? Things are getting worse and worse...

May 23, 2016

  How can it be, that the Fed has STILL not provided the documents long ago requested under FOIA about Huntington - FirstMerit? Things are getting worse...

May 16, 2016

  Last week Inner City Press asked an economist from UN DESA about the likelihood of a Fed rate hike in June, here: https://youtu.be/HjmZSDhHjF4

May 9, 2016

The Fed on Republic ruled that Inner City Press / Fair Finance Watch "contends that Republic Bank’s past tax refund anticipation loan product is an example of problems with Republic Bank’s lending record....

 Through partnerships with tax preparers and tax software preparation companies, Republic Bank offered tax refund anticipation loans whereby the bank extended tax
refund advances to taxpayers shortly after they filed their tax returns. The advances were secured by the taxpayers’ refunds. In response to safety and soundness and consumer
compliance concerns raised by the FDIC regarding this tax refund anticipation loan product offered by Republic Bank, the product was discontinued in 2012 pursuant to an
agreement between the FDIC and Republic Bank. Republic Bank recently launched a new product that offers advances of taxpayers’ refunds; however, as discussed in more
detail below, Republic represents that the new product has significantly different terms and protections that address the FDIC’s concerns regarding the prior product."

We'll have more on this...

May 2, 2016

Inner City Press / Fair Finance Watch has asked the Fed this:

"We note that the FRB of Chicago, until Reserve Banks in New York, Philadelphia, Cleveland, Richmond and Atlanta, does not list an email address for comments - this should be acted on and improved."

April 25, 2016

ICP Awaits Fed's FOIA Response on Huntington - FirstMerit, May 16 New Date

By Matthew R. Lee

NEW YORK, April 22 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks, more Fed-favored banks like Goldman Sachs - through those in the upper bulge like Huntington, seeking to buy First Merit and close more than 100 branches.

 Inner City Press / Fair Finance Watch on March 19 filed with the Federal Reserve a challenge to Huntington's application to acquire First Merit and close 107 branches. On April 16, Inner City Press made a third filing, for an extension of the comment period.

  On April 22, a week after Inner City Press' request but a day after Huntington CEO Steve Steinour downplayed the branch closures to his shareholders, the Federal Reserve called Inner City Press and said the comment period will now run to May 16. Later this was put online.

 While appreciated, will this help keep branches open? We'll see - for now, the Fed has extended its time to respond to Inner City Press' long pending Freedom of Information Act request:

April 18, 2016
 
Mr. Matthew R. Lee
Inner City Press
PO Box 20047
New York, NY 10017
 
Re:       Freedom of Information Act Request No. F-2016-0152
 
Dear Mr. Lee,
 
On March 21, 2016, the Board of Governors (“Board”) received your electronic message dated March 20, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552... Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until May 2, 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 May 2, 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.
 
  So the documents should come in before May 16. Watch this site.

April 18, 2016

Inner City Press has filed: This is a timely third comment opposing, reiterating ICP's March 20 FOIA request on, and requesting an extension of the FRB's public comment period on the Application by Huntington Bancshares to acquire FirstMerit Corporation.

  The Board has STILL not responded to ICP's FOIA request and the comment period must be extended on that ground alone.
 
   This proposed merger would, if approved, result in the closure or “consolidation,” see below, of more than 100 branches -- nearly 50 are in the Cleveland, Akron and Canton areas. Huntington's lending in two of these areas was analyzed in ICP's first comment; FirstMerit is initially reviewed here. More will follow. These closures and “consolidations” would cause harm; what would be the countervailing public benefit? Public hearings are needed.

In its most recently submission, Huntington states that “the Board published notice of the Application in the Federal Register on March 17, 2016, inviting the public to comment on the Application through April 15, 2016.  Therefore, the current comment period on the Application is 36 days and it remains open to provide interested members of the public and ample time to comment on the Application.”
 
  Inner City Press is informed that Huntington has represented that it will not oppose, in fact will support, an extension of the comment period. Yet it is 4:50 pm on April 15 and nothing has been announced. Therefore this submission, requesting an extension of the comment period.
April 11, 2016

  So 107 prospective branch closures by Huntington, and not only no Fed public hearing - no extension of the comment period to consider this near-unprecedented level of closure? Pathetic...

April 4, 2016

 Goldman Sachs ultimately on March 21 obtained 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...  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.

 On April 2, Inner City Press submitted a timely request for reconsideration:

"While there are many portions of the approval order crying for reconsidering, to be clear ICP will herein have the the following focus, because it goes to the heart of a major flaw with today's Federal Reserve: the Approval Order states

"Two commenters express concerns about GS Bank’s use of the Board’s prefiling process, suggesting that commenters could not participate in the resolution of substantive issues raised by the proposal because these issues were resolved before the filing of this application. One of these commenters withdrew its comments in full following its discussions with GS Bank.

“The Federal Reserve has established a prefiling process to provide potential applicants with information about the procedural requirements, such as timing and the applicable forms, associated with a proposal. See SR Letter 12-12. This process also helps to identify information that may be needed in connection with issues that the Board typically considers in connection with a particular type of application or notice, such as competition or financial stability. The prefiling process is not used, and was not used in this case, to resolve or predetermine the outcome of any substantive issues. As in every case, the substantive issues involved in this case were considered and resolved as part ofthe processing of GS Bank’s formal application. In doing so, the Board considered all public comments on the proposal.”

This misrepresents ICP's comments, and more importantly the Fed's actual process as reflected by documents the Fed belatedly released in response to ICP's FOIA requests.

To emphasize: the FRB's General Counsel solicitiously agreed to weekend phone calls with Goldman's outside council Rodgin "Rodge" Cohen at Sullivan & Cromwell, and the Fed submitted its "Additional Information" request to Goldman in July, a full month before any application was submitted or the deal publicly announced.

Specifically, 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." The proposed transaction was not publicly announced until August 13, and Goldman did not submitted its (pre-vetted) application until August 18.

How can this too-early Additional Information letter be consider consistent with the Order's statement that “the prefiling process is not used, and was not used in this case, to resolve or predetermine the outcome of any substantive issues”?

It cannot be.

Even as redacted, the belatedly released documents show that on May 14 and May 18, Goldman Sachs and its outside counsel Rodgin 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.

Likewise, the redactions from “Rodge's” May 29, 2015 letter are outrageous, and appealed.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, redactions from which also appealed.

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." This evasion of FOIA and of the Fed' stated process should be addressed in your ruling on this request for reconsideration.

On June 26, the Fed's 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"? And by conducting this “review” prior to any public notice, the Fed is evading the ex-parte rules. This too should be addressed - and corrected - in connection with this.

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." Why was this sent BEFORE ANY APPLICATION or public notice? This must be addressed.

On Friday, July 17 the Fed's Thomas Baxter wrote to Scott Alvarez that the transaction would be publicly announced the next Monday -- AFTER the Fed's "additional information request" -- based on a long voice-mail 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 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-vetted application. This was contrary to law, and now to the Order.

While our focus is on the above, we note for this that (March 30) “An ex-Goldman Sachs Group Inc. banker, Rohit Bahal, was ordered on probation, after having his former co-worker, Jason Gross, steal documents from the Federal Reserve Bank of New York. Judge Gabriel Gorenstein stated that Bahal's two-year probation time was sufficient because his reputation has already been ruined on social media. Prosecutors were displeased with the outcome as they Bahal's should have received tougher, punishment for stealing about 35 documents on 20 separate occasions.”

ICP said that a hearing was needed, and reiterates that.

March 28, 2016

After Taking Goldman Sachs Calls on Sunday, Fed Approves GE, ICP FOIAs

By Matthew R. Lee

NEW YORK, March 21 -- The lack of seriousness in US bank regulation grows from the largest banks like Goldman Sachs - which gets weekend service from the Federal Reserve's top lawyer - down to Huntington, trying to close 106 branches.

 Goldman Sachs on January 14, 2016 withheld basic information from the response it was required to send to Inner City Press, see below.

But on March 21, after the Fed was notified of extensive irregularities in its processing of the Goldman Sachs - GE application, the Board hauled off and approved it, saying, in footnote 49, that

"Two commenters express concerns about GS Bank’s use of the Board’s prefiling process, suggesting that commenters could not participate in the resolution of substantive issues raised by the proposal because these issues were resolved before the filing of this application. One of these commenters withdrew its comments in full following its discussions with GS Bank.

 The Federal Reserve has established a prefiling process to provide potential applicants with information about the procedural requirements, such as timing and the applicable forms, associated with a proposal. See SR Letter 12-12. This process also helps to identify information that may be needed in connection with issues that the Board typically considers in connection with a particular type of application or notice, such as
competition or financial stability. The prefiling process is not used, and was not used in this case, to resolve or predetermine the outcome of any substantive issues. As in every case, the substantive issues involved in this case were considered and resolved as part ofthe processing of GS Bank’s formal application. In doing so, the Board considered all public comments on the proposal.

Voting for this action: Chair Yellen, Vice Chairman Fischer, and Governors Tarullo, Powell, and Brainard."

March 21, 2016

 Inner City Press / Fair Finance Watch has filed with the Federal Reserve a timely first comment opposing / requesting public hearings on the application by Huntington Bancshares to acquire FirstMerit Corporation.  This proposed merger would, if approved, result in the closure of more than 100 branches -- nearly 50 are in the Cleveland, Akron and Canton areas  Two of these areas are analyzed below; more will follow. These closures would cause harm; what would be the countervailing public benefit? Public hearings are needed.

  Huntington in the Akron MSA in 2014 made 197 home purchase loans to whites -- and only nine to African Americans and only three to Latinos. 

For refinance loans, Huntington in the Akron MSA in 2014 made 263 loans to whites and only nine to African Americans and only ONE to Latinos. Its denial rate for Latinos was 77.8%, versus only 50.7% for whites.

For home improvement loans, Huntington in the Akron MSA in 2014 made 23 loans to whites and only FOUR to African Americans and NONE to Latinos. Its denial rate for Latinos was 100%.

    Huntington in the Cleveland MSA in 2014 made 582 home purchase loans to whites -- and only 37 to African Americans and only nine to Latinos. 

For refinance loans, Huntington in the Cleveland MSA in 2014 made 680 loans to whites and only 58 to African Americans and only 14 to Latinos. Its denial rate for Latinos was 80%, versus only 54% for whites; Huntington's denial rate for African Americans was 72%.

For home improvement loans, Huntington in the Cleveland MSA in 2014 made 88 loans to whites and only NINE to African Americans and only one to Latinos. Its denial rate for Latinos was 96.4%, versus only 72.8% for whites; its denial rate for whites was fully 94%.

    We will have more comments, but for now the comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved.
March 14, 2016

Sandy, we hardly knew ye: Sandra Braunstein, formerly of the Federal Reserve Board, at the Wolters Kluwer CRA and Fair Lending Colloquium: "I am suggesting that the agencies consider requiring that internal analysis, and a public CRA plan be part of the application process. This requirement would increase bank transparency and accountability to the community and the regulators."

  Inner City Press has protested BNC Bancorp and its proposed expansion for some time, based on lending disparities and lack of transparency. The Federal Reserve, while purporting to be transparent until its Rules on Ex Parte Communication, on March 11 provided Inner City Press with another terse memo that disclosed... nothing. Here it is:

On March 2, 2016, staff of the Federal Reserve System met with executives of BNC Bancorp (“BNC”), High Point, North Carolina at the Federal Reserve Bank of Richmond (“Reserve Bank”) to discuss financial, managerial, and supervisory related matters that the Board would need to consider in its review of BNC’s proposal to acquire Southcoast Financial Corporation (“Southcoast”), and its subsidiary bank, Southcoast Community Bank, both of Mount Pleasant, South Carolina, pursuant to section 3(a)(5) of the Bank Holding Company Act of 1956.
 Participants of the in-person meeting consisted of the following: Richard Callicutt (Chief Executive Officer and President) and David Spencer (Chief Financial Officer) of BNC, and Keith Larkin (Assistant Vice President of Supervision, Regulation and Credit), Paul Frey (Managing Examiner of Supervision, Regulation and Credit), Adam Drimer (Assistant Vice President in Applications), Richard Gilbert (Vice President of Supervision, Regulation and Credit) and Wayne Cox (Banking Applications Manager) of the Reserve Bank. Stuart C. Stock, Esq. (counsel for BNC) participated via teleconference. The following staff of the Board participated via teleconference: Patrick Grant of the Board’s Division of Banking Supervision and Regulation; and Victoria Szybillo and Amber Hay of the Board’s Legal Division.
 At the beginning of the meeting, staff of the Board’s Legal Division discussed the Board’s rules on Ex Parte communications that would govern any discussions related to BNC’s proposal to acquire Southcoast.
Discussion: The meeting was scheduled as a follow-up item to the Reserve Bank’s inspection of BNC and its subsidiary bank, Bank of North Carolina (“Bank”), Thomasville, North Carolina. The meeting centered on topics that would be considered by the Board in its review of an application under the financial, managerial, and supervisory factors of section 3 of the BHC Act. During the meeting, BNC’s executives shared information regarding (i) BNC’s plans for handling the integration of acquired entities into BNC’s banking organization, (ii) the Bank’s and BNC’s capital levels, and (iii) the Bank’s and BNC’s future plans
 Due to the receipt of a public comment alleging that BNC and Southcoast have engaged in discriminatory lending practices in certain metropolitan statistical areas, the Board’s rules on Ex Parte communications precluded discussion with BNC concerning the convenience and needs factor under section 3 of the BHC Act. Staff of the Board’s Legal Division remained throughout the meeting to ensure compliance with the Board’s rules on Ex Parte communications.
March 7, 2016

Federal Reserve Gives ICP Memo of BNC Meeting, from Jan 28, Faux Ex Parte

By Matthew R. Lee

NEW YORK, March 1 -- 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, after that, High Point Bank & Trust.

 On March 1 the Federal Reserve e-mailed Inner City Press a memo about a meeting it had with BNC Bank's highest executives, under the Fed's rules on Ex Parte contacts, avoiding the fair lending and Community Reinvestment Act issues which Inner City Press has raised. We are publishing the Federal Reserve memo online here.

  But as Inner City Press immediately replied, including to the Fed's Office of the Secretary, why did the Fed wait until March 1 to send a memo of a January 28, 2016 meeting -- more than a month? Does that comply with any meaningful rule on Ex Parte communications? We'll have more on this.

  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.

February 29, 2016

On First Niagara, Key Says It'll Address Branches Later, Withholds, ICP FOIAs

By Matthew R. Lee

NEW YORK, February 23 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - and those in the upper bulge like KeyCorp, seeking to buy First Niagara and close a lot of branches.

 In a submission to the Federal Reserve dated February 12 but only mailed to Inner City Press on February 20, Key answers questions about branch closings by saying "Additional information will be provided supplementally." Key withholds a Community Reinvestment Act and other answers. See here.

 Inner City Press on February 23 submitted a FOIA request:

This is a FOIA request for the entirety of the February 12, 2016 submission in connection with the Application by Application by KeyCorp to acquire First Niagara Financial Group of which a heavily redacted copy was received by Inner City Press on February 22-23, as a timely commenter, by Goldman Sachs. (The cover letter to ICP says February 12, but the USPS Express envelope says Feb 20, notice received Feb 22, picked up Feb 23.)

   Key's answer has many exhibits withheld -- all of which we are hereby requesting under FOIA. Simply as examples:  Page 1 referes to Confidential Exhibit 1 and 2(a); Page 2 refers to Confidential Exhibits 2(b), 3, 4 and 5; in the Community Reinvestment Acti section, “Confidential” Exhibit 10 is withheld. We also note that the Fed still owes ICP a FOIA response on this application, and that Key's answer on branch closings is 'Additional information will be provided supplementally.' The comment period must be extended; we request this information in advance."

February 22, 2016

ICP Challenged Republic Bank, Fed Qs, No FOIA Response on Key - First Niagara

By Matthew R. Lee

NEW YORK, February 16 -- The lack of seriousness in US bank regulation grows from the relatively smaller to the largest banks like Goldman Sachs - through those in the upper bulge like KeyCorp, seeking to buy First Niagara and close a lot of branches, down to Kentucky-based Republic Bank, back in the tax loan business including in New York City.

  On Republic, Inner City Press / Fair Finance Watch in late 2015 challenged its proposal to acquire Cornerstone Bank, stating among other things:

" 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.

“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."

 And, in fact, Inner City Press has photographed Republic's high cost tax loan posters in New York City. Now the Fed has asked:

In Republic’s letter to the Federal Reserve Bank of St. Louis dated December 17, 2015 (the “Letter”), Republic asserted that, “[RepublicBank] no longer offers refund anticipation loans and will not provide tax refund anticipation loans as a result of the proposed transaction. The fact that [RepublicBank] previously provided refund anticipation loans does not relate to the
competitive effects of the transactions contemplated by the [a]pplication, does notrelate to Republic’s financial and managerial resources, does not have any bearing on Republic’s ability to meet community needs, does not relate to compliance with the Bank Secrecy Act, and does not affect the financial stability of the United States. Consequently, we respectfully submit that the fact that [Republic Bank] previously provided refund anticipation loans is simply not relevant to any of the
statutory factors the FRB is required to consider under the Bank Holding Company Act.”

 But now it does...

 So the Fed asks, "consumer advocates have expressed
concern that tax preparers may pass along RAL fees to customers. Please respond to this concern. Your response should include a description of Republic Bank’s monitoring and auditing plans."

Back on December 16, Inner City Press filed a Freedom of Information Act request with the Federal Reserve about the Key / First Niagara proposal. On January 20, the Fed extended its time to reply -- to February 2, AFTER the comment period was set to expire on January 31.

  As of February 16, the Fed has still not provided the FOIA response it said it would on February 2...

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.