Inner City Press: Federal Reserve Beat (FOIA, FOMC, CRA, Predatory Finance)

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February 24, 2020

Morgan Stanley, Made a Bank Holding Company Without Comment by FRB, Now Makes $13B Offers For E-Trade, Highlighting Community Reinvestment Act Fight

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

SOUTH BRONX, Feb 20 – Morgan Stanley's proposed $13 billion takeover of E-Trade Bank not only might trigger other acquisitions: it also steps right in the middle of a bank deregulatory move in which E-Trade Bank was almost shielded from the Community Reinvestment Act by rogue US Comptroller of the Currency Joseph Otting. Fair Finance Watch and Inner City Press will be raising the issues.

February 17, 2020

Community Reinvestment Act Attack by Otting Triggers Fed Powell Half True Answer in House

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

SOUTH BRONX, Feb 11– The current US Comptroller of the Currency Joseph Otting cashed out of his position with OneWest Bank in California by overseeing fake comments in favor its acquisition by the CIT Group.

Then, emboldened, he devoted the Office of the Comptroller of the Currency to weakening or destroying the Community Reinvestment Act which provides for the public process that he subverted with fake comments.

On February 11, Federal Reserve chairman Jerome Powell answered but was not held to task on the CRA. Rep. Nydia Velazquez, D-N.Y., asked Powell if he "would agree... that it's more important to get the rule right than to do it quickly."

"Yes, I mean I think that's been our approach and will continue to be," Powell said in response.

But the Fed's approach has also been to allow applicants like Banco Bradesco to withhold for a month their answers in CRA protested proceedings. We'll have more on this.

Inner City Press, which along with CRC opposed the merger and then pursued a Freedom of Information Act request for all documents about Otting's fraud, soon found its and Fair Finance Watch's comments to the OCC being rejected, or ignored, or returned.

While Inner City Press' FOIA requests get fee waivers from the Federal Reserve and a range of agencies in the US and beyond, Otting's OCC suddenly started denying them, hindering access to the merger applications on which CRA is enforced.

Otting is trying to push through this CRA-killing proposal on a short comment period, cognizant of the other CRA, the Congressioal Review Act. But it is obvious that even banks want more time.

On January 26, in advance of Otting's belated January 29 House of Representatives appearance, Inner City Press / Fair Finance Watch submitted a formal comment, and since then another. Watch this site.

February 10, 2020

Received from an increasingly untransparent US Federal Reserve: all portions that Banco Bradesco chose ot withheld, and late-send, will be withheld. Well, we will be appealing. Watch this site.

February 3, 2020

While some are praising the Federal Reserve on CRA, note that when Banco Bradesco without explanation withheld its submission from Fair Finance Watch during a CRA protest, the Fed ignored it, leading Bradesco's lawyer Reena Agrawal Sahni to arrogantly write to the Fed, smail mail to Inner City Press, that "we do not believe that there was been any gaming of a system." Well, we do - no explanation of withholding the document for a month is even offered. In a court, there would be sanctions for contempt. At the Fed, with banks? It's all among friends. We'll have more on this.

January 27, 2020

Here a report Inner City Press is looking into: Iraqi Union Bank is owned by the brothers Aqil and Ali Muftin, who according to the report have close ties with pro-Iran former Iraqi PM Nuri al-Maliki. In 2016, the American Federal Reserve placed $200 million of the bank's funds on hold due to suspicion of corruption.

But the Fed's slow and worse response to FOIA on Bangladesh Bank does not bode well..

January 20, 2020

To Fed Bradesco Late Sent CRA Redacted Info to Inner City Press But FRBNY Ignores It

By Matthew R. Lee, Exclusive

SOUTH BRONX, SDNY, Jan 15 – Amid escalating attacks on the U.S. Community Reinvestment Act, Inner City Press / Fair Finance Watch back in August filed comments under the CRA opposing Banco Bradesco's application to acquire BAC Florida, see below.

Now the Fed has entirely ignored evidence that Banco Bradesco and its outside law firm gamed the system and violated the Fed's own Rules Against Ex Parte Communications by withholding for a month from Inner City Press a letter they emailed to Fed - and snail mailed a month late to Inner City Press.

And the Fed's delay spawned even more outrageous behavior by Bradesco and its outside law firm Shearman and Sterling. Inner City Press / Fair Finance Watch on January 11 complainted to the Federal Reserve Board: "Re: Outraged Supplemental Comment on Application by Banco Bradesco to acquire BAC Florida in Extraordinary Circumstances: redacted CRA answer of Dec 11 sent to us Jan 9

Dear Chair Powell, Secretary Misback and others in the FRS:

This is a supplemental comment opposing and requesting redacted information late sent -- cynically mailed a month late - and in this connection an extension of the FRB's public comment period on the Application by Banco Bradesco to acquire BAC Florida. As we stated in August, this is a proposal by a bank in Brazil where authorities are reviewing the bank for corruption, to buy a US bank with a disparate lending record in order to use it to serve disproportionately the affluent. There is no public benefit; the application should be denied. Troublingly, today I received in regular mail an envelope mailed on January 9 by Bradesco's outside law firm. Inside the envelope was a submission including about CRA, redacted - and the letter to the Fed was dated December 11, four weeks prior.

So Bradesco is trying to redacted CRA information - and cynically snail mailed its submission to Inner City Press four weeks after they submitted it to the Fed.

We have today submitted a FOIA request for all of the redacted information - in fact, it should be provided forthwith under the Ex Parte Rules. But the Fed must act on this, the four week delay. The comment period must be reopened and this application should - must - be denied. Otherwise banks will game the system and the Fed simply accept it. This letter should be responded to forthwith."

But here on January 15 is the Federal Reserve Bank's non-responsive response: "Dear Mr. Lee: January 15, 2020 We acknowledge receipt on January 13, 2020 of your e-mail dated January 11, 2020 ("Comment Letter"), commenting on the application submitted by Banco Bradesco, S.A., Lecce Holdings S.A., Fundacao Bradesco, BBD Partipacoes S.A., Nova Cidade de Deus Participacoes S.A., and Cidade de Deus Cia. Comercial de Participcoes ( collectively, the "Applicants"), all of Osasco, Sao Paulo, Brazil for prior approval of the Board of Governors of the Federal Reserve System (the "Board") pursuant to Section 3(a)( I) of the Bank Holding Company Act of 1956, as amended, and Section 225.15 of Regulation Y, to become bank holdings companies by acquiring substantially all of the shares of SAC Florida Bank, Coral Gables, Florida. The Board generally provides a period of at least 30 days for interested members of the public to comment on applications submitted under the BHC Act. See 12 C.F.R. §§ 225.16 and 262.3(e). Comments received after the end of the public comment period generally will not be made pa1i of the record considered by the Board, though the Board may, in its sole discretion and without notifying the paiiies, take into consideration the substance of late comments. See 12 C.F.R. § 262.3( e ). The public comment period for this application ended on August 12, 2019. Since your Comment Letter was received after the end of the public comment period, it will not be made a part of the record of this application unless the Board in its sole discretion determines to consider your late comments. By email dated August 10, 2019, however, you previously submitted timely comments that have been made a part of the application record that the Board will consider. Sincerely, cc: Board of Governors Reena Sahni, Esq.- Shearman & Sterling LLP ~ Brian S. Steffey Assistant Vice President Bank Applications Function." Really? Watch this site.

January 13, 2020

To Fed Bradesco Late Sends Community Reinvestment Act Redacted Info to Fair Finance Watch

By Matthew R. Lee, Exclusive

SOUTH BRONX, SDNY, Jan 11 – Amid escalating attacks on the U.S. Community Reinvestment Act, Inner City Press / Fair Finance Watch back in August filed comments under the CRA opposing Banco Bradesco's application to acquire BAC Florida, see below.

Dear Chair Powell, Secretary Misback and others in the FRS:

So Bradesco is trying to redacted CRA information - and cynically snail mailed its submission to Inner City Press four weeks after they submitted it to the Fed.

January 6, 2020

Last week Inner City Press reported on its complaint to the Federal Reserve about the Fed having hid merger proposals until the comment periods closed. Now they've posted a few - but no written response to the complaint or the formal requests in it. We'll have more on this.

December 30, 2019

Community Reinvestment Act Assault By OCC Joined In By Federal Reserve Hiding Mergers CFPB Hiding Data

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

SDNY / BRONX, Dec 28 – The assault against the U.S. Community Reinvestment Act, begun by Comptroller of the Currency Joseph Otting then joined in by the FDIC and the Consumer Financial Protection Bureau withholding mortgage data, has reached the Federal Reserve.

For months the Federal Reserve has first slowed down its disclosure of pending merger applications on which the public can comment under CRA, and now outright hide them, such that on its website no proposed mergers have open comment periods. Call it the death, or attempted murder, of the Community Reinvestment Act.

Alongside comments to the OCC and FDIC, Inner City Press / Fair Finance Watch on December 28 filed comments with the Federal Reserve: Dear Chair Powell, Secretary Misback, others in FRB: On behalf of Inner City Press / Fair Finance Watch and in my personal capacity, this is questionlessly tiemly protest to one sample application, a complaint about the FRB's failure update its H2A, and on the withholding of 2018 HMDA data in online form by CFPB and other FFIEC regulators including the FRB - and a demand for actions. Currently as of December 28, the most recent application on the FRB's online H2A has a comment period ending December 20 - that is, already closed. This negligence, or intentional exclusion of the public, has been the case at the FRB for months. All comment periods must be re-opened.

Here is a timely protest to one sample application that (only) the Federal Register tells us has a comment period expiring "not later than December 30, 2019.A. Federal Reserve Bank of Chicago (Colette A. Fried, Assistant Vice President) 230 South LaSalle Street, Chicago, Illinois 60690-1414:1. Bosshard Financial Group, Inc., La Crosse, Wisconsin; to merge with Northern Bankshares, Inc., and thereby indirectly acquire Mc Farland State Bank, both of McFarland, Wisconsin.Board of Governors of the Federal Reserve System, November 25, 2019."

Second and more systematic problem, that must be solved or all comment periods extended: the Consumer Financial Protection Bureau for 2018 data has unilaterally removed the ability of the public to view HMDA data by race on its website, which the FFIEC / Federal Reserve allowed in previous years and the CFBP did even in 2017. Inner City Press / Fair Finance Watch contends that the CFPB's move is both anti-public and illegal.

Given this situation, which must be addressed, for now Inner City Press timely submitted the two attached photos from the CFPB's disturbingly and intentionally stripped down site. In 2018 in Wisconsin, McFarland made 206 loans to white, and only three to African Americans. This is an interim protest; the comment period(s) must be extended.

Here are some more applications not in the FRB's H2A, requiring explanation and extension of comment periods:

not later than December 20, 2019. A. Federal Reserve Bank of Atlanta (Kathryn Haney, Assistant Vice President) 1000 Peachtree Street NE, Atlanta, Georgia 30309. 1. BCI Financial Group, Inc., Miami, Florida; to merge with Executive Banking Corporation, and thereby indirectly acquire Executive National Bank, both of Miami, Florida. In connection with this proposal, Bci Financial Group, Inc.'s parent companies, Empresas Juan Yarur SpA and Banco de Credito e Inversiones S.A., both of Santiago, Chile, to indirectly acquire Executive Banking Corporation and Executive National Bank. not later than December 20, 2019. A. Federal Reserve Bank of St. Louis (David L. Hubbard, Senior Manager) P.O. Box 442, St. Louis, Missouri 63166-2034. 1. Citizens Union Bancorp of Shelbyville, Inc., Shelbyville, Kentucky; to merge with Owenton Bancorp, Inc., and thereby indirectly acquire Peoples Bank & Trust Company, both of Owenton, Kentucky.

not later than January 23, 2020. A. Federal Reserve Bank of St. Louis (David L. Hubbard, Senior Manager) P.O. Box 442, St. Louis, Missouri 63166-20341. Comments can also be sent electronically to Comments.applications@stls.frb.org: First Horizon National Corporation, Memphis, Tennessee; to acquire IBERIABANK Corporation and thereby indirectly acquire IBERIABANK, both of Lafayette, Louisiana.

B. Federal Reserve Bank of New York (Ivan Hurwitz, Senior Vice President) 33 Liberty Street, New York, New York 10045-0001. . Barclays US Holdings Limited, New York, New York; a company organized under the laws of the Cayman Islands, to become a bank holding company by acquiring Barclays US LLC, also of New York, New York, and thereby indirectly acquire Barclays Bank Delaware, Wilmington, Delaware. In addition, Barclays PLC and Barclays Bank PLC, both of London, England, to retain Barclays US Holdings Limited and thereby indirectly acquire Barclays US LLC and Barclays Bank Delaware.

not later than January 9, 2020. A. Federal Reserve Bank of New York (Ivan Hurwitz, Senior Vice President) 33 Liberty Street, New York, New York 10045 1. First Bancorp, San Juan, Puerto Rico; to acquire Santander BanCorp and thereby indirectly acquire Banco Santander Puerto Rico, both of San Juan, Puerto Rico. In addition, FirstBank Puerto Rico, San Juan, Puerto Rico, to become a bank holding company for a moment in time by acquiring Santander BanCorp and thereby indirectly acquiring Banco Santander Puerto Rico.

In this context, Inner City Press / Fair Finance Watch is demanding an extension of all comment periods by the FRB, its intervention with the CFPB to restore access on the website itself to 2018 HMDA data, and on the current record the denial by the FRB of these application(s). Thank you for your prompt attention, Matthew R. Lee Inner City Press / Fair Finance Watch

Watch this site.

December 23, 2019

Heard in Germany: "One study estimated that more than a quarter of bitcoin users and roughly half of bitcoin transactions, for example, are associated with illegal activity," the Fed's Lael Brainard told the Monetary Policy: The Challenges Ahead event in Frankfurt. But what had the Fed done about the banks which participated in money laundering for OneCoin? We'll have more, much more, on this in 2020.

December 16, 2019

After Community Reinvestment Act Protest to Banco Bradesco Fed Delays Report on Ex Parte Meeting

By Matthew R. Lee, Exclusive

SOUTH BRONX, SDNY, Dec 13 – Amid escalating attacks on the U.S. Community Reinvestment Act, Inner City Press / Fair Finance Watch back in August filed comments under the CRA opposing Banco Bradesco's application to acquire BAC Florida, see below.

On December 12 on a two and a half week delay the Federal Reserve sent Inner City Press a terse summary of an ex parte meeting it held with Bradesco. The delay was not explained; if the past is any guide, this may just be the Fed ticking the boxes in order to rubber stamp Bradesco's application despite its record. Here's the memo: Hello Mr. Lee, I’m writing regarding the section 3 application by Banco Bradesco S.A. (“Bradesco”) and certain affiliates to acquire BAC Florida Bank pursuant to section 3 of the Bank Holding Company Act. Attached, please find a summary of a meeting that took place between representatives of Bradesco and Federal Reserve staff. This document has been included as part of the application’s public record. Regards, Evans Muzere Legal Division Board of Governors of the Federal Reserve System: TO: File FROM: Staff SUBJECT: Meeting with representatives of Banco Bradesco S.A. DATE: December 12, 2019 Meeting attendees • Board of Governors of the Federal Reserve System: Evans Muzere and Jon Stoloff (Legal Division); Betsy Howes-Bean and Pat Soriano (Division of Supervision and Regulation); and Peggy Naulty (Division of Consumer and Community Affairs). • Federal Reserve Bank of New York: Lisa Kraidin (Legal).1 • Shearman & Sterling LLP: Mr. Timothy Byrne, Esq. and Ms. Reena Sahni, Esq. • Banco Bradesco S.A.: Mr. Henrique Leme Pinto Lima, Officer; Ms. Yara Piauilino, M&A Superintendent Executive. Summary: On Monday, November 25, 2019, staff of the Board of Governors of the Federal Reserve System (“Board”) held a meeting with outside counsel and employees of Banco Bradesco S.A. (“Bradesco”), Osasco, São Paulo, Brazil. The meeting occurred at the request of Bradesco and took place at the Board’s main office building in Washington, D.C. The meeting focused on the structure and home country supervision of Bradesco’s four parent companies: (1) Fundação Bradesco, (2) BBD Participações S.A., (3) Nova Cidade de Deus Participações S.A., and (4) Cidade de Deus Cia. Comercial de Participações, all of Osasco, São Paulo, Brazil. Meeting attendees discussed the management structure and activities of Bradesco’s parent companies. Bradesco’s representatives described the rationale for the group structure and answered questions regarding the ownership chain and activities of the parent companies. Attendees also discussed the home country supervision of Bradesco’s parent companies by Brazilian authorities, including the Brazilian Central Bank. This discussion focused on the methods by which the Brazilian Central Bank and other Brazilian authorities exercise oversight over Bradesco’s parent companies." And what was said? And what about this? We'll have more on this.

December 9, 2019

From last week's Senate Banking Committee: Comptroller Otting was here where he basically said he thought the Fed was not going to be involved. So for the record and for my colleagues, can you clear up whether you intend to have the Fed involved in this much needed reform process. QUARLES: Well, this is a -- you know this is a continuing effort to look at -- at CRA modernization. There is agreement among all the agencies, as well as everyone who considers the issue; community groups, the banks. I think among many here that -- you know that CRA -- that the implementation of the Community Reinvestment Act can be improved given evolution in the banking industry. And given, you know as I've said, kind of the ossification of practice over time. The Federal Reserve is committed to that and has been working together with the other agencies as part of this process. Now, the issue that's immediately at hand is when will a notice of proposed rulemaking come out. But that is an interim step to any final rule. At the outside of the process, the OCC went forward independently of both the FDIC and the Fed with an advanced notice of proposed rulemaking. We all benefited from the information that they received. The Fed also had a broad information gathering process at all our reserve banks at the same time as that advanced notice of proposed rulemaking was happening. The FDIC had its separate process. And all of that has come into, now, the consideration of the notice of proposed rulemaking. So while it isn't -- you know while it hasn't 100 percent been decided yet whether it -- at this next step, the notice of proposed rulemaking, all three agencies will go together or some may go separately in the same way as that first step was done separately by each of the agencies. But it was all part of a joint process. I wouldn't draw too much from if that is, again, one or two agencies going separately on the notice of proposed rulemaking because we will continue to be working together on trying to get to a final rule and my expectation is still that when we get to that final rule, it will be all three agencies together. WARNER: (Inaudible) Because you know obviously if we have OCC, FDIC, you guys not involved; we're ending up with a new set of rules and regulations that would cover 80 percent of the market but not the very critical component that you guys cover. You know we're not going to be able to bring that consistency modernization and what I think very, very important role that CRA plays. So ... QUARLES: Completely agree. WARNER: I'm going to -- I'm going to take your answer as yes, you guys will be involved. There will not be a hodge-podge of rules. There will be a uniform final answer that will include all three regulatory agencies. QUARLES: That's the objective. WARNER: OK. So that is a yes. You know as I try to put as many words as possible in your mouth; it would be -- it will be all three? QUARLES: Well, yes would be one of the words that I would say. But yes, as -- that -- that is the objective is that we -- we are aiming to get to a final rule all together. And if it happens that the interim steps happen at different speeds, I wouldn't draw too much from that.

December 2, 2019

From the speech last week by Governor Lael Brainard at the Presentation of the 2019 William F. Butler Award New York Association for Business Economics, New York, New York: "To be successful, formal makeup strategies require that financial market participants, households, and businesses understand in advance and believe, to some degree, that policy will compensate for past misses. I suspect policymakers would find communications to be quite challenging with rigid forms of makeup strategies, because of what have been called time-inconsistency problems." The speech also has "communications" in the title, but very little about transparency, as the Fed for example withholds nearly all records about the Bangladesh Bank hack. Next stop: the Fed's knowledge of the banks laundering money for OneCoin...

November 25, 2019

What has amazed Inner City Press while covering the OneCoin / Mark Scott money laundering trial in the SDNY for the past three weeks is the number of banks implicated: Deutsche Bank, BNY Mellon, IBERIABANK and others - we'll be raise these issues, watch this site.

November 18, 2019

Inner City Press / Fair Finance Watch received from the Federal Reserve last week a cover letter - without the attachment that went to Banco Bradesco: "Dear Mr. Lee Please see the attached AI request in connection with the filing by Banco Bradesco, S.A., Lecce Holdings S.A., Fundacao Bradesco, BBD Partipacoes S.A., Nova Cidade de Deus Participacoes S.A., and Cidade de Deus Cia. Comercial de Participcoes (collectively, the “Applicants”), all of Osasco, Sao Paulo, Brazil for prior approval of the Board of Governors of the Federal Reserve System (the “Board”) pursuant to Section 3(a)(1) of the Bank Holding Company Act of 1956, as amended, and Section 225.15 of Regulation Y, to become bank holdings companies by acquiring substantially all of the shares of BAC Florida Bank, Coral Gables, Florida. Once we receive the response, we will forward to you also." And attached, on this: " Please see the attached additional information request letter in connection with the filing by Banco Bradesco, S.A., Lecce Holdings S.A. , Fundacao Bradesco, BBD Participacoes S.A., Nova Cidade de Deus Participacoes S.A., and Cidade de Deus Cia. Comercial de Participcoes, all of Osasco, Sao Paulo, Brazil, to become bank holding companies by acquiring substantially all of the shares of BAC Florida Bank, Coral Gables, Florida." That that, nothing attached...

For now: "
Banco Bradesco Class Action Settlement Hits 2 Day Hitch on Blacksmiths and Rule 11 in SDNY

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

SDNY COURTHOUSE, Nov 12 – In 2016 Banco Bradesco was sued for fraud on the market for withholding information about being investigated as part of the Operation Zelotes probe of tax fraud in Brazil.

The case, a putative class action, was filed in the U.S. District Court for the Southern District of New York and was assigned to Judge Gregory H. Woods.

On November 13 in Judge Woods' nearly empty courtroom what was styled as a fairness hearing on a near-final settlement was held. Only two issues held up Judge Woods signing off on the over $14 million settlement, with 25% going for attorneys fees. In the gallery was only Inner City Press.

An October 8 notice of motion says that "Court-appointed Lead Counsel Kessler Topaz Meltzer & Check LLP will on and hereby do move this Court, on November 13, 2019 at 4:15 pm, for entry of an Order awarding attorney's fees and expenses."

But at the time, with the gallery nearly empty, the order was not signed. The firm wanted Judge Woods to find that they had not violated Rule 11.

Judge Woods, however, said he did not have the factual predicate to be comfortable making that finding, and ask for further filings by November 15, including on a proposed $7,605.61 payment to Boilermaker-Blacksmith National Pension Trust. The case is In Re Banco Bradesco S.A. Securities Litigation, 16-cv-3144 (Woods).

November 11, 2019

"Thousands of companies around the world are now reporting climate-related financial exposures to the Carbon Disclosure Project (CDP) under the guidelines of the Financial Stability Board (FSB) Task Force on Climate-Related Financial Disclosures." That's Lael Brainart; in other news, no follow through on ensuring that FOIA requests related to mergers are ruled on before the Fed closes comment periods. Also, problems with HMDA availability from CFPB: isn't this as much in the Fed's wheelhouse and area of responsibility?

November 4, 2019

While the CFPB continues to withhold basic mortgage lending data, we note that a spokesperson for disparate LendingClub is quoted: “We are completely committed to fair lending practices. Researchers at the Philadelphia Fed have analyzed our data and concluded that we’re lending in more areas where banks are closing their branches, we’re improving pricing and the quality of credit decisioning, and increasing financial inclusion.” Wait - so now the Federal Reserve has handing out fair lending cover up fig leafs to disparate fintechs? What will the Federal Reserve Board do about this?

October 28, 2019

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

We'll have more on this.

October 21, 2019

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

October 14, 2019

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

October 7, 2019

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

By Matthew Russell Lee

SOUTH BRONX, SDNY COURT, Oct 5 – Talk about bias: a member of the U.S. Federal Reserve Board, Michelle Bowman, who is supposed to objectively review challenged bank mergers had been quoted that mergers are good: mergers “in a general sense, are a natural and often desirable consequence of competition in a vibrant market economy,” Bowman said.

This is unacceptable. Meanwhile the Fed is still withholding documents about the Bangladeshi Central Bank hack and its role in it requested months ago by Inner City Press under the Freedom of Information Act, has put out for comment a proposal to further weaken its duties under FOIA. The proposal does not even address an obvious disrespect by the Fed to public commenters which Inner City Press raised to a Fed Governor earlier this year. Now as a first comment, this has been submitted:

June 15, 2019

Via e-mail to regs.comments [at] federalreserve [dot] gov

Board of Governors of the Federal Reserve System Attn: Governors, Ann E. Misback, Secretary 20th Street and Constitution Avenue NW Washington, DC 20551
Re: First Comment on Docket No. R–1665 and RIN No. 7100 AF 51

Dear Governors and Ann E. Misback, Secretary:

On behalf of Inner City Press, a frequent requester to the Federal Reserve Board (FRB) and other agencies under the Freedom of Information Act (FOIA), and in my personal capacity, this is a first comment on the proposed revisions to the FRB's proposed rulemaking (proposal) that would amend the Board’s Rules Regarding Availability of Information (Board’s Rules).

As a practitioner what is most disappointing about this rulemaking is that the FRB has not even proposed to address a major problem raised to it, including to Governor Lael Brainard earlier this year: that the FRB routinely delays responding to FOIA requests and even frivolous requests for confidential treatment by applicants for regulator approval under AFTER the Board has approved contested merger applications. As Inner City Press asked Governor Brainard, how does this FRB failure not incentivize applicant banks to make overbroad requests for confidential treatment of their applications, responses to public comment and response to FRB Additional Information requests, knowing that there is no repercussion nor commitment by the FRB to address the overbroad withholding request until after their applications are approved? Given the FRB's legal duty to consider public comments on mergers, including comments informed by what the applicant banks actually submit, the FRB must address this problem in this rulemaking.

Overall, the FRB not only denied expedited processing of Inner City Press' request for FRB records concerning its actions and role in the Bangladesh Bank hack and case - it has refused to respond to an appeal of its constructive denial of access to any records, after months, see below incorporated herein by reference. This too must be addressed. For now, we also note the potential abuse, shown most recently by the FRB's sister agency the OCC, that allowing the agency to do nothing to begin collecting records as long as it disputes a fee waiver request. The OCC is still disputing a fee waiver request for the submissions of WSFS for approval to acquire Beneficial in Philadelphia, long after the OCC (like the FRB) approved the Application. We may have further comment but wished the raise the above at the earliest possible time in the process to ensure that the FRB belatedly address the issue(s).

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

September 30, 2019

While letting Citi, Chase and other off the hook, this: "WHEREAS, the Board of Governors of the Federal Reserve System (the “Board of Governors”), pursuant to section 8(e) of the Federal Deposit Insurance Act, as amended (the “FDI Act”), 12 U.S.C. §§ 1818(e), issues this Order of Prohibition (this “Order”) upon the consent of Respondent Bettie McGuire Shomaker (“Shomaker”), a former employee and institution-affiliated party, as defined in sections 3(u) and 8(b)(3) of the FDI Act, 12 U.S.C. §§ 1813(u) and 1818(b)(3), of Highlands Union Bank (the “Bank”), a state-member bank; WHEREAS, in 2017 and 2018, while employed as manager of the Bank’s Banner Elk branch, Shomaker, in violation of Bank policy, generated loans for relatives, did not send these loans to the Bank’s loan operations department for booking, and used one of these loans for her own benefit; WHEREAS, Shomaker’s misconduct described above constituted unsafe or unsound banking practices, demonstrated a reckless disregard for the safety and soundness of the Bank, and caused financial loss the Bank."

September 23, 2019

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

September 16, 2019

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

September 9, 2019

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

By Matthew R. Lee, Exclusive

SOUTH BRONX, SDNY, Sept 7 – Amid attacks on the U.S. Community Reinvestment Act this month Inner City Press / Fair Finance Watch in early August filed comments under the CRA opposing Banco Bradesco's application to acquire BAC Florida. Now the Federal Reserve has asked Bradesco some questions, below. Here's some of the protest: "This is a timely first comment opposing and requesting documents about and an extension of the FRB's public comment period on the Application by Banco Bradesco to acquire BAC Florida. This is a proposal by a bank in Brazil where authorities are reviewing the bank for corruption, to buy a US bank with a disparate lending record in order to use it to serve disproportionately the affluent. There is no public benefit; the application should be denied. Fair Finance Watch has been reviewing the Home Mortgage Disclosure Act (HMDA) data for 2017 for BAC Florida and finds, troublingly, that for home purchase loans in the New York City MSA it made 13 such loans to Asians, and none to African Americans or Latinos. For Latinos it hada 100% denial rate. In the Miama MSA in 2017, BAC Florida made 68 home puchase loans to whites and none to African Americans. Now see, for the record, "Brazil's Bradesco to buy Florida bank to focus on wealthy individuals" - "Banco Bradesco SA has embarked on its first-ever international acquisition by paying approximately $500 million to buy BAC Florida Bank, which focuses on high-net-worth individuals in a move intended to close the gap with Brazilian rivals. Based in Coral Gables, BAC Florida is controlled by Grupo Pellas, which was founded in 1877 in Nicaragua. After the deal closes, Bradesco said its main goal is to provide a wide range of financial services in the United States to Bradesco clients and lure new customers to BAC Florida. Bradesco Chief Executive Officer Octavio de Lazari said on a call with journalists that the Brazilian bank’s private banking clients have increasingly demanded diversification and greater access to global products. “This move underscores our expansion not only in the U.S., but also in Latin America as a whole, as BAC has clients all over the region,” he said. Around 20 percent of BAC Florida’s clients are Brazilian and 9 percent are American. Still, Lazari said Bradesco is not seeking to build a retail base outside Brazil, but wants to boost its private banking business." Where is the CRA?

Now see this, on managerial resources, also for the record and the request for an evidentiary hearing: "Brazilian anti-graft prosecutors mull lawsuit against Bradesco" - " Brazilian prosecutors are considering a civil lawsuit against Banco Bradesco SA , as they believe the country’s second-largest private-sector bank may have failed to prevent corruption schemes, Valor Econômico reported on Thursday. Earlier this week, prosecutors asked a court to issue an arrest warrant for two Bradesco bank managers, saying they had been part of a complex scheme involving shell companies, fraudulent checks and bank slips that helped launder nearly 1 billion reais ($252 million). Eduardo El Hage, the prosecutor heading the Rio de Janeiro part of the massive “Car Wash” corruption investigation, told the Brazilian newspaper he believes Bradesco should have caught on to those financial transactions. Bradesco declined to comment on the matter." On the current record, Banco Bradesco's applications should be denied."

On September 6, the Federal Reserve asked Bradesco questions including "Based on our review of the current record, the following additional information is requested. Please provide responses to all of the following items, including those in the Confidential Annex. Supporting documentation should be provided, as appropriate. Proposal 1. The filing states that Lecce will be a Brazilian holding company over BAC. Discuss the role and purpose of Lecce and how it will be integrated into the governance, operating, and reporting structure of Bradesco. 2. Provide a summary of the findings of the due diligence review by Shearman & Sterling LLP, KPMG, and CRMa, LLC., and discuss whether any findings had a bearing on Bradesco's strategy for BAC or would result in changes to BAC's risk management framework and internal controls. 3. Discuss whether the U.S. securities broker-dealers of BAC and Bradesco will maintain separate operations and customer bases, or whether their operations and customers are expected to be integrated. 4. Provide an updated list of the proposed directors and senior executive officers of BAC indicating which of the current BAC directors and senior executive officers are expected to remain with BAC. For any of the proposed directors and senior executive officers who currently have positions with Bradesco, provide their roles in the chart.

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

September 2, 2019

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

August 26, 2019

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

By Matthew Russell Lee, Patreon

FEDERAL COURTHOUSE, August 19 – The Bangladeshi Central Bank which was hacked for $81 million in February 2016, on January 31 sued in the US District Court for the Southern District of New York. The first pre-trial conference in the case was held on May 21; on July 19 Bangladesh Bank opposed the defendant's motions to dismiss for forum non conveniens and lack of subject matter jurisdiction.

On related obstruction news, in a letter dated August 20 the US Federal Reserve Board upheld its own denial of documents about Bangladesh Bank with Inner City Press requested under the Freedom of Information Act. More here including the Fed's letter on Patreon, here. We'll have more on this.

Rizal Commercial Banking Corporation's Ismael Reyes has started a separate ex parte action in the SDNY, seeking discovery against Bank of New York Mellon. That case has been assigned a separate number: 19-cv-7219.

Bangladesh Bank responded on August 19, telling SDNY Judge Lorna G. Schofield that "Defendants did not clarify that the 1782 procedure does not work against crucial governmental discovery sources, like the FBI and possibly the New York Fed, pointing instead to the vastly more limited FOIA process." So it is apparently unclear if Section 1782 applies to the Fed; that the Federal Reserve limits - and delays - FOIA, Inner City Press can attest to. We'll have more on this.

Earlier, Bangladesh Bank wrote that "[t]he robbery was in New York City, not a foreign country, attacking a decades-old account in the New York. It involved the New York Fed, perhaps the most critically important bank in New York City. The conspirators also needed New York-based correspondence accounts to accomplish the theft." In its other brief it adds, "Since 1973, the Bank has held its foreign reserves at the New York Fed in order to conduct Bangladesh’s international transactions in U.S. dollars. Id. ¶¶ 37-40. Today, the Bank conducts 85% of its international transactions in the U.S. dollar, through its New York Fed account, that holds a daily average of $1.5 billion."

Back in March Inner City Press submitted a request under the US Freedom of Information Act to the US Federal Reserve about its role in and action on the Bangladesh Bank heist. After four months of delay from the Fed, and an appeal by Inner City Press of their constructive denial, the Fed finally ruled on June 27 - releasing only one page, a two paragraph cover letter.

This is the opposite of transparency.

August 19, 2019

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

By Matthew R. Lee, Exclusive

SOUTH BRONX, SDNY, August 10 – Amid attacks on the U.S. Community Reinvestment Act this month Inner City Press / Fair Finance Watch has filed comments under the CRA opposing Banco Bradesco's application to acquire BAC Florida. Here's some of it: "This is a timely first comment opposing and requesting documents about and an extension of the FRB's public comment period on the Application by Banco Bradesco to acquire BAC Florida. This is a proposal by a bank in Brazil where authorities are reviewing the bank for corruption, to buy a US bank with a disparate lending record in order to use it to serve disproportionately the affluent. There is no public benefit; the application should be denied. Fair Finance Watch has been reviewing the Home Mortgage Disclosure Act (HMDA) data for 2017 for BAC Florida and finds, troublingly, that for home purchase loans in the New York City MSA it made 13 such loans to Asians, and none to African Americans or Latinos. For Latinos it hada 100% denial rate. In the Miama MSA in 2017, BAC Florida made 68 home puchase loans to whites and none to African Americans. Now see, for the record, "Brazil's Bradesco to buy Florida bank to focus on wealthy individuals" - "Banco Bradesco SA has embarked on its first-ever international acquisition by paying approximately $500 million to buy BAC Florida Bank, which focuses on high-net-worth individuals in a move intended to close the gap with Brazilian rivals. Based in Coral Gables, BAC Florida is controlled by Grupo Pellas, which was founded in 1877 in Nicaragua. After the deal closes, Bradesco said its main goal is to provide a wide range of financial services in the United States to Bradesco clients and lure new customers to BAC Florida. Bradesco Chief Executive Officer Octavio de Lazari said on a call with journalists that the Brazilian bank’s private banking clients have increasingly demanded diversification and greater access to global products. “This move underscores our expansion not only in the U.S., but also in Latin America as a whole, as BAC has clients all over the region,” he said. Around 20 percent of BAC Florida’s clients are Brazilian and 9 percent are American. Still, Lazari said Bradesco is not seeking to build a retail base outside Brazil, but wants to boost its private banking business." Where is the CRA?

By Matthew Russell Lee, Patreon

SDNY COURTHOUSE, August 4 – Three years after Capital One Bank was sued for its overdraft fees on debit card transactions for which there were sufficient funds available in the customers' accounts, on June 25 the bank's motion for summary judgment was denied by U.S. District Court for the Southern District of New York Judge Lorna G. Schofield.

On July 29 Capital One belatedly disclosed that it was "compromised," including 140,000 social security numbers, 80,000 linked bank account numbers, and “personal information” from credit card applications from 2005 through early 2019. This hacking began on March 12, but Capital One didn’t do anything about it until 127 days later. And where were and are the regulators, who approved Capital One's mergers rebuffing detailed Press comments?

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

August 5, 2019

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

By Matthew R. Lee, FOIA docs, BB&T denial

NEW YORK CITY, August 2 – When BB&T announced a $66 billion proposal to take over Suntrust Bank, to form a subsequently named Truist, many linked it to deregulatory moves in Washington. Then two days after Federal Reserve Governor Lael Brainard was asked by Inner City Press about the Fed's lax review of previous mergers, including WSFS on which the Fed still hasn't ruled on the bank's withholding of information after rubber stamping the deal, the Fed announced public hearings. But the fix it seems it still in. On April 18, conveniently, the Fed "announce[d] termination of enforcement action with BB&T Corporation" for money laundering. So there's a public comment period on the merger, but none on the Fed's dubious move while the application is pending. Meanwhile as Inner City Press has exclusively reported, BB&T has been named in connection with sleazy debt collections in a case in the SDNY - more on all this to come. On April 29, Inner City Press submitted a FOIA request about the dubious termination of enforcement action, and a comment to the Fed and FDIC, below.

On August 2 the FDIC belatedly gave Inner City Press only the June 2019 Order ending without explanation the money laundering enforcement action against BB&T. The FDIC redacted John P. Henrie's signature as private information. What else are they withholding? Watch this site.

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

July 29, 2019

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

July 22, 2019

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

By Matthew R. Lee, FOIA docs, BB&T denial

NEW YORK CITY, July 20 – When BB&T announced a $66 billion proposal to take over Suntrust Bank, to form a subsequently named Truist, many linked it to deregulatory moves in Washington. Then two days after Federal Reserve Governor Lael Brainard was asked by Inner City Press about the Fed's lax review of previous mergers, including WSFS on which the Fed still hasn't ruled on the bank's withholding of information after rubber stamping the deal, the Fed announced public hearings. But the fix it seems it still in. On April 18, conveniently, the Fed "announce[d] termination of enforcement action with BB&T Corporation" for money laundering. So there's a public comment period on the merger, but none on the Fed's dubious move while the application is pending. Meanwhile as Inner City Press has exclusively reported, BB&T has been named in connection with sleazy debt collections in a case in the SDNY - more on all this to come. On April 29, Inner City Press submitted a FOIA request about the dubious termination of enforcement action, and a comment to the Fed and FDIC, below.

On the afternoon of May 2, before seeking to close the comment period on BB&T - Suntrust on May 3, the Federal Reserve wrote to Inner City Press that only ONE PAGE about its BB&T money laundering enforcement termination would be provided, and 133 pages withheld in full, no even subject to the type of partial redaction that is required under FOIA. FRB 99% denial letter here.

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

July 15, 2019

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

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

July 8, 2019

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

By Matthew R. Lee, Video, 7/31 story

SOUTH BRONX, July 5 – Cadence Bancorporation which has a disparate lending record while apply to buy State Bank in Georgia and urging faster regulatory approvals, seemingly jumped the gun before having the required Federal Reserve Board approval. That was six months ago, when a letter that Cadence and its outside counsel, former Federal Reserve lawyer Patricia Robinson, were required to provide a copy to Inner City Press / Fair Finance Watch they on purpose only sent by mail (rather than e-mail), then delayed weeks in resending. Photo here.

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

July 1, 2019