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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.
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)."
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.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."
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.
May 30,
2016
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
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
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.
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.
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.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, 2016Now,
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."
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."
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.
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.
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/
“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/
"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/
“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.
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/
“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/
“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. "
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.
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."
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."
September 14, 2015
On Goldman Sachs - GE Capital, ICP has formally demanded that the Fed provide a FOIA ruling that can be appealed, before the comment period closes, whether on September 19 or later...
So M&T, noted discriminator, has settled a Fair Housing Act case. But its purported partner Hudson County has not - the merger should not be considered for any approval. Time for a hearing.
September 7, 2015Even as New York regulators says their comment period on Goldman Sachs' GE Capital proposal extends at least through September 28, Goldman has published fine print notices in the New York Post and a newspaper in Utah saying the Federal Reserve will stop listening on September 19.
Really? After the Fed made Goldman Sachs a bank holding company with no public comment period at all, so Goldman could get a bail-out? After the Fed's coziness with Goldman Sachs was again demonstrated, by the audio taped by then-Fed examiner Carmen Segarra?
Inner City Press immediately submitted
a Freedom of Information Act request
for all of Goldman Sachs' GE Capital
application and related records. The
Federal Reserve has provided a heavily
redacted copy, on which Inner City
Press / Fair Finance Watch has
commented to the FRB in Washington:
"Among many
other things, Goldman Sachs believes
it can withhold the volume of deposits
it seeks to acquire from GE Capital
Bank, WHAT is seeks to acquire (and
what not to acquire) from GE Capital
Bank, its number of employees in Utah,
the contact people on its application,
the number of non profit organizations
it tells the FRB it serves on the
board of -- presumptively public --
and even the NAMES of the exhibits it
seeks to withhold entirely. This is
abusive and unprecedented and the FRB
must, in response, have the comment
period begin again. Otherwise,
applicants only benefit by making
absurd and abusive requests for
confidential treatment. There is much
more to be said, including at the
public hearings ICP is requesting, but
it is imperative that the Board act on
this as quickly as possible."
When Goldman Sachs became a bank
holding company literally overnight in 2008,
Inner City Press / Fair Finance Watch and
others including NCRC asked the Fed how
this was done with no public comment period
at all.
The
answer, it seems, is to be found in
the audio
leaked by Carmen Segarra of the
Federal Reserve, showing further Fed
favors for Goldman Sachs.
With
this history, and Goldman's history in
predatory lending with Litton
Servicing and as an underwriter, see
Occupy Wall Street video here,
and UN
/ migration connection here, it
seems clear that the Fed must hold
public hearings on Goldman Sachs' GE
Capital application, when it is filed.
But with the Federal Reserve, you can never be too sure, or too careful.
August 31, 2015
So the Federal Reserve produces a video purporting to say what the Community Reinvestment Act is - without any description of the public comment on merger process. Hmm...
August 24, 2015Why would the Fed pick yet another Goldman Sachs alumni to head the Federal Reserve Bank of Dallas? We'll have more on this.
August 17, 2015When the FRBNY's William Dudley spoke in Rochester NY, apparently the Goldman Sachs - Carmen Segarra scandal did not come up...
August 10, 2015Federal
Reserve Asks Community Bank System -
Oneida To Drop Two Merger Agreement
Provisions
By Matthew
R. Lee
NEW YORK,
August 8 -- The lack of seriousness in
US bank regulation extends from large
to smaller banks. As Inner City Press
exposed last month, Royal Bank of
Canada jumped the gun and began doing
business with City National Bank
without any Federal Reserve approval
(see Los
Angeles Times, here.)
Community Bank System of upstate New
York filed with the Fed nine answers
to questions asked after Inner City
Press' challenge -- and tried to
withhold fully eight of the nine
responses. More
here.
Now
an August 7 letter from the Federal
Reserve to Community Bank System
indicates problems with its February
merger agreement, specifically
Sections 5.7(b)(9) and (10). Click
here to view Fed letter,
uploaded by Inner City Press.
How
could a bank of this size, that wants
to become bigger, write and sign a
merger agreement like this?
To
find out, Inner City Press immediately
filed a Freedom of Information Act
request for the whole submission - and
even the Federal Reserve has seen
through Community Bank System's
absurdly -- and tellingly -- overbroad
withholding, releasing all but one
part of one of the eight withheld
responses.
August 3,
2015
Fed Rejects
Community Bank System - Oneida
Withholding 8 of 9 Responses - but Gov
Powell Rubber-Stamps on FOIA Appeals
By Matthew
R. Lee
NEW YORK,
August 1 -- The lack of seriousness in
US bank regulation extends from large
to smaller banks. As Inner City Press
exposed last month, Royal Bank of
Canada jumped the gun and began doing
business with City National Bank
without any Federal Reserve approval
(see Los
Angeles Times, here.)
Community Bank System of upstate New
York filed with the Fed nine answers
to questions asked after Inner City
Press' challenge -- and tried to
withhold fully eight of the nine
responses. More
here.
Inner City Press immediately filed a
Freedom of Information Act request for
the whole submission - and even the
Federal Reserve has seen through
Community Bank System's absurdly --
and tellingly -- overbroad
withholding, releasing all but one
part of one of the eight withheld
responses.
Here's
is the Federal Reserve's letter
to Inner City Press granting most of
its FOIA request:here
is the now unredacted version of Community Bank System's
submission.
Meanwhile, Fed governor Jay Powell
continues rubber-stamping on FOIA appeals - on this, we'll have
more.
July 27,
2015
To Federal
Reserve Board, Community Bank System -
Oneida Withhold 8 of 9 Responses - ICP
Challenges Under FOIA
By Matthew
R. Lee
NEW YORK,
July 25 -- The lack of seriousness in
US bank regulation extends from large
to smaller banks. Last week the
Federal Reserve hauled off and
approved CIT - One West, with whose
executives the Fed
met before the deal was even
announced a year ago.
Further down the food chain, Community
Bank System of upstate New York filed
with the Fed nine answers to questions
asked after Inner City Press'
challenge -- and is trying to withhold
fully eight of the nine responses. More
here.
Inner
City Press is challenging this under the Freedom of Information
Act, comparing Community Bank System's outrageous withholding at
the Fed with other banks, and with Community Bank System's to the
OCC, more
here.
July 20, 2015
RBC - City
National Gun Jumping Covered by LAT,
After FFW Raised It, CBSI Contrasted
By Matthew
R. Lee
NEW YORK,
July 18 -- The largest bank merger
recently proposed, that of Royal Bank
of Canada and affluent-focused Los
Angeles-based City National Bank, has since April
been the subject of a Community
Reinvestment Act challenge by Fair
Finance Watch.
Now
the LA Times has reported
on the "letter from the Fed [which]
asks the banks to respond to questions
raised in written comments by [FFW].
Spokesmen for the banks declined to
comment.... Fair Finance Watch, a New
York advocacy group for minorities,
questioned a deal between the banks in
a June 11 comment letter to the Fed."
Inner City Press first put that Fed
letter online, here; then
Canada's National / Financial Post
reported without credit it had
"obtained" it.
By
contrast, in another pending proposal,
CBSI
- Oneida, the Syracuse
Post-Standard disclosed
that "Inner City Press forwarded the
letter to news outlets. Some of the
Fed's questions focus on whether
Community could improperly control
matters at Oneida in advance of the
acquisition. Community is working
on Fed's questions, said Hal
Wentworth, Community's senior vice
president for retail banking."
One
common theme is that non-control (and
therefore antitrust) laws are being
violated. One difference is that CBSI
does comment to the media -- if only
to blame
the messenger -- while larger
RBC and CNB do not. Arrogance?
On CBSI's blaming the messenger, FFW has commented to the Fed that it will "will comment again when CBSI has provided a copy of its response to the FRS' questions of July 13. Beyond the CRA and impermissible “control” questions raised therein, we wish at this time to raise the issues that, in a public response to ICP's comments, CBSI's SVP for retail banking said the following, in a prepared statement no less:
'In a statement today, Hal Wentworth, Community's senior vice president for retail banking, said that Inner City Press is not a local group and pointed out that letter was the only one filed on the Oneida deal. "This activist does not do business with either Oneida or Community Bank."'
If it would be inappropriate for CBSI to comment on or disclose information about its customers, in this context the same applies to the above-quoted, which, separately, is reminiscent of human rights abusing countries emphasizing where the rights groups who study and report on them are based."
July 13,
2015
When the Fed acted on BB&T - Susquehanna with FOIA issues not satisfactorily resolved, it said "in the first quarter of 2015, the FDIC also approved a proposal by Branch Bank to acquire 41 branches of Citibank, National Association, in Texas. In connection with that proposal, the FDIC directed Branch Bank to develop a CRA strategic plan." We'll have more on this.
July 6,
2015
RBC - City
National Gun Jumping Questioned by
Fed, After FFW Raised It
By Matthew
R. Lee
NEW YORK,
July 3 -- The largest bank merger
recently proposed, that of Royal Bank
of Canada and affluent-focused City
National Bank, has since April been
the subject of a Community
Reinvestment Act challenge by Fair
Finance Watch.
Now
Royal Bank of Canada has been asked
more questions by the Federal Reserve.
Inner City Press has uploaded
the letter, here.
On
June 6, FFW submitted
into the record before the Fed:
"RBC, City National off to friendly start ahead of $5.4B takeover Globe and Mail, May 26, 2015, quoted from below.
Now
the Federal Reserve has asked RBC:
"A
commenter alleged that in May 2015 RBC
and CNB collaborated to extend credit
to a customer of CNB. Please
address this claim. In your response,
discuss in detail in detail whether
RBC exercises a controlling influence
over the management or policies of CNC
or CNB without prior approval of the
Board. In addition, discuss whether,
since entering into the proposed
transaction, RBC and CNB have
collaborated, or plan to collaborate,
on extending credit to any other
borrower, and describe the nature and
circumstances of those
collaborations."
June 29,
2015
So
rather than trying
to explain to the
Federal Reserve
why it violated
the law and began
to collaborate
with City National
it hasn't been
approved to
acquire, Royal
Bank of Canada on
June 24 told the
Fed it had managed
to get another
comment withdrawn.
Well, not that of
Inner City Press /
Fair Finance
Watch. Lawless....
June 22, 2015
Talk about phoning it in. The Fed on June 15 wrote or ruled, on an application where Inner City Press / Fair Finance Watch was the commenter:
The Board received two comments from a single commenter who objected to the proposal principally on the basis of Sterling Bank’s record of extending home mortgage credit to minority individuals in the New York-Wayne-White Plains, New York-New Jersey Metropolitan Division (“New York City MSA”) and the NassauSuffolk Metropolitan Division (“Nassau-Suffolk MD”), as reflected in data reported under the Home Mortgage Disclosure Act (“HMDA”)17 for 2013. The commenter expressed concerns that, based on 2013 HMDA data, Sterling Bank was not meeting th credit needs of minority individuals in the communities served by the bank.18 The commenter also contended that Sterling Bank’s HMDA data are “irregular.” The commenter noted that the bank reported three withdrawn and three incomplete applications for refinance loans to African Americans in the New York City MSA and no denials, suggesting that the bank is prescreening minority borrowers.
Fn 18: Sterling represented that Hudson Valley Bank is primarily a commercial lender and does not have a material mortgage program. Mortgage loans represented approximately 14 percent of the bank’s overall lending portfolio as of December 31, 2014.”
FN 19: Sterling asserted that three loan applications were withdrawn at the prospective borrowers’ request because they did not wish to continue the transaction and that the three other applications were deemed incomplete because the prospective borrowers did not provide the requested property, asset, or income documentation needed by the bank to make a lending decision.”
So the Fed accepts 14% as “not material”? And that all people of color “requested” to withdraw their applications is acceptable? This vague commitment does not make up for it:
Sterling Bank has determined to increase its marketing and outreach efforts to better serve the needs of its communities and has adopted its revised CRA Plan. Although the bank intends to remain primarily a commercial lender, it expects to increase its outreach efforts for residential mortgages. Sterling Bank also stated that it will continue pursuing the other community development and CRA-related initiatives set forth in its revised CRA Plan. Sterling plans to reassess the goals and objectives in its CRA Plan to determine if any adjustments are necessary to reflect the acquisition of Hudson Valley.”
We'll have more on this. And this - on another application ICP has commented on, this was reported:
“In a statement today, Hal Wentworth, Community's senior vice president for retail banking, said that Inner City Press is not a local group and pointed out that letter was the only one filed on the Oneida deal. 'This activist does not do business with either Oneida or Community Bank, but nonetheless made vague allegations regarding Community,' Wentworth said. 'These allegations were entirely without merit and will be fully addressed by Community Bank and Oneida Savings in the application process.'”
If it would be illegal for CBSI to so disclose information, for its own purposes, about those who have accounts with it, how is this not illegal too? And from a human rights perspective, what a pathetic and telling response. We'll have more on this.
June 15, 2015With all due respect, are there any applicable Federal Reserve revolving door rules? "Wolters Kluwer Financial Services recently announced that former federal regulator Sandra Braunstein will provide compliance management and Community Reinvestment Act consulting services to the company’s U.S. banking clients. 'The deep insight and experience that Sandy brings not only to Wolters Kluwer Financial Services’ consulting practice and clients but to our executive leadership team is truly unique and extraordinary,' said Timothy Burniston, EVP of Wolters Kluwer Financial Services' Consulting Practice in the US"...
June 8,
2015
RBC - City
National Comment Period Extended,
Banks Jumped the Gun
By Matthew
R. Lee
NEW YORK,
June 6 -- The largest bank merger
recently proposed, that of Royal Bank
of Canada and affluent-focused City
National Bank, has since April been
the subject of a Community
Reinvestment Act challenge by Fair
Finance Watch.
Now
the Federal Reserve Board has granted
FFW an extension of the comment period
on the proposed merger, through June
11, FRB
letter here, due to RBC
improperly withholding information
which was subsequently released after
a Freedom of Information Act (FOIA)
request by Inner City Press.
FFW will comment by June 11 - but has
submitted to the Fed an objection
dated June 6 noting the two banks
admitted they are already working
together on transactions, without any
authorization.
FFW on June 6 submitted into the
record before the Fed:
"RBC, City National off to friendly start ahead of $5.4B takeover Globe and Mail, May 26, 2015
June 1, 2015
Here's a scam: Royal Bank of Canada and City National wrongfully withheld basic information like their list of subsidiaries during the comment period, now after Inner City Press' FOIA request they release some of the information -- but with the Fed having closed the comment period. This is a scam.
May 25, 2015Now belatedly the Fed replies on FOIA on CIT - and DOJ comes through, much later, FDIC on BB&T.
May 18, 2015
The Federal
Reserve Board
has hit a new
low on Freedom
of Information
Act
compliance. On
May 15, its
Governor
Jerome Powell,
put in charge
of FOIA
appeals after
joining
the Fed from
Deutsche Bank
and the
Carlyle Ground,
rubber stamped
by rote all of
the Fed's FOIA
withholdings,
for example on
CIT - OneWest.
Previous
Governor in
that post have
most often
overturned
parts of the
underlying
denial, but
Powell upholds
each and every
withholding --
like a FISA
court, some
say, or a
court in
Egypt. Inner
City Press
predicted this
back in
2011-2012,
and
noted it on
Capital One.
But it has
gotten worse.
When New York Fed president William Dudley read a prepared speech to the Bronx Bankers earlier this month, he had a lot of canned advice on how to help the borough. He didn't say what he would do to actually enforce the Community Reinvestment Act and resist regulatory capture by Citi, Chase and Goldman Sachs...
May 11,
2015
Fed
Withholds OneWest Branch Closing, CIT
Internet Deposit Info, ICP Appeals
By Matthew
Russell Lee
NEW YORK,
May 9 -- Federal bank regulators
remain captured by large and
becoming-large banks like the CIT
Group, a Freedom of Information Act
response to Inner City Press from the
Federal Reserve this week shows.
Like
the Fed's previous
FOIA response, exclusively published
here, that showed its officials
met CIT and OneWest before their
proposed merger was announced, this
time the Fed is withholding
information on services and branches
to be shuttered by OneWest.
These include a low income branch at
390 W. Valley Parkway, Escondido, CA
92025 and another at 2245-B Ventura
Blvd, Camarillo, CA 93010.
For
another branch to be shuttered, the
address is entirely redacted, blacked
out. Inner City Press has submitted an
appeal under FOIA, also for
information withheld about CIT Bank's
Internet Deposit Data by County. How
can the Community Reinvestment Act be
enforced in this way? Even the names
of the counties have been withheld.
Now that the US House Oversight Committee, though spokesperson Melissa Subbotin Sillin, is asking for FOIA horror stories, the Federal Reserve and the other bank regulators -- and the US State Department, on delay -- should and will be looked at.
May 4,
2015
On the
application of
Royal Bank of
Canada and City
National Bank,
the Federal
Reserve has hit
a new low -
Inner City
Press' request
under FOIA of
April 11, it
waited to
acknowledge
until the stated
end of the
comment period.
More than a week
later, still
none of the
requested
documents have
been provided.
We'll have more
on this.
April 27, 2015
In a new low, the Federal Reserve waited until the absolute deadline