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December 23, 2024

Fraudster Sterling Bancorp Bid To Sell Bank with Weak CRA to Everbank Questioned on NY

by Matthew R. Lee, Patreon Substack

FEDERAL COURT, Dec 20 – Sterling Bancorp, which settled with DOJ on securities fraud, it trying to sell its Sterling Bank & Trust including in New York, where it has a need to improve CRA Investment Test rating to Everbank. Fair Finance Watch with Inner City Press on the FOIA has filed a timely first comment on, the Applications

   This is a request for a full copy of, and a timely first comment on, the Applications of EverBank to acquire Sterling Bank & Trust (with a rare Needs to Improve CRA rating on Investment Test in New York), and not scandal plagued Sterling Bancorp.        Sterling Bancorp was recently prosecuted by DOJ; EverBank purports that by buying the bank portion it is not touched by the scandal. But what is the showing that the criminal conduct at the Bancorp was entirely insulated from the bank and those who work there, and its practices?      As a CRA matter, militating for a hearing, Sterling Bank has a rare Needs to Improve rating on the investment test in NY.

On December 4 Everbank's outside counsel wrote in that FFW "selectively criticizes a single component of Sterling Bank’s most recent CRA performance evaluation from states in which Sterling Bank either no longer operates, will no longer operate upon completion of the Proposed Transaction, or maintains only a de minimis banking presence" -- that would be New York, no commitment to improve on the Needs to Improve. As to Michigan the outside counsel says, or brags, "EverBank intends to close Sterling Bank’s only Michigan branch following completion of the Proposed Transaction."

On December 19, the Federal Reserve asked Everbank questions including "Explain whether EverBank’s office in New York is a “branch” within the meaning of 12 U.S.C. 1841(o)(3) and indicate whether loan proceeds are disbursed at that New York office.

3. The FR Y-3 notes: “following the Proposed Transaction, the combined organization intends to leverage the CRA and consumer protection compliance strengths of both banks to create a strong and comprehensive combined compliance program.” The FR Y-3 subsequently states that “EverBank does not anticipate any structural changes to its CRA program, CRA leadership, organizational structure, or oversight as a result of the Proposed Transaction.” Clarify whether the combined organization intends to continue to utilize EverBank’s existing CRA and consumer compliance programs following consummation. If the combined organization intends to incorporate specific aspects of Sterling Bank’s CRA and consumer those programs the combined organization intends to leverage from Sterling Bank’s existing operations.

4. The FR Y-3 notes that Sterling Bank would use commercially reasonable efforts to close its Southfield, Michigan branch... Indicate whether a branch closure notice has been submitted under section 42 of the FDI Act."

The proposal should be denied.

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December 16, 2024

SouthState Lending Disparities Triggered CRA Protest But Fed OKs Admitting Weak Carolinas

by Matthew R. Lee, Patreon Substack

SOUTH BRONX / SDNY, Dec 13 – When First Republic Bank failed / was given to JP Morgan Chase, a small list of other regional banks came into focus as in danger, banks whose lending Inner City Press and Fair Finance Watch had been scrutinizing, even more so that the 2023 data is out.

  This week Inner City Press filed with the Fed, a timely first comment on, the Applications of SouthState Corporation to merge with Independent Bank Group, Inc., and Independent Bank.  

  SouthState in South Carolina in 2023 - data not yet included in any CRA exam - made 5013 mortgage loans to whites, and only 228 loans to African Americans. Meanwhile it denied only 670 applications from whites, and fully 195 from African Americans. SouthState should be referred to DOJ.  

  SouthState in North Carolina in 2023 - data not yet included in any CRA exam - made 1334 mortgage loans to whites, and only FIFTY SEVEN loans to African Americans. Meanwhile it denied only 173 applications from whites, and fully 20 from African Americans. 

  SouthState in Georgia in 2023 - data not yet included in any CRA exam - made 1176 mortgage loans to whites, and only 318 loans to African Americans. Meanwhile it denied only 304 applications from whites, and fully 88 from African Americans.  

 Nationwide in 2023, SouthState made 7798 mortgage loans to whites, and only 947 loans to African Americans. Meanwhile it denied only 2491 applications from whites, and fully 558 from African Americans.  

  Why would regulators even consider approving its expansion? 

On August 9, SouthState submitted to the Fed a response - that deals only with Independent Bank.

On September 18, the Fed asked SouthState questions including "Confirm that no consumer products or community development programs or services offered by either organization will be discontinued by the combined organization as a result of the proposed transaction, other than those identified in Confidential Exhibit 18 to the application."

Inner City Press has submitted a FOIA request with the Fed for that obviously CRA-material Exhibits.

  No thanks to the Fed, Inner City Press got the exhibit - SouthState just withdrew its request for confidential treatment, of this: "CONFIDENTIAL  SouthState Bank, N.A. Independent Bank  Discontinued Independent Bank Products and Services  June 2024  SSC and IBTX currently plan on discontinuing Independent Bank’s mortgage warehouse program and selling its Shared National Credits (SNC) portfolio. Almost all purchased SNCs are in Independent Bank’s commercial loan portfolio, with the largest single industry concentration in energy."

But there is more being withheld. SouthState filed on September 30: "Please see Confidential Exhibit 1 to the Confidential Appendix for additional information on branch actions SouthState may plan to take that are unrelated to the proposed transaction."

On December 13 the Fed rubber stamped the deal, even as it admitted it is order poor performance in South Carolina and poor geographic distribution of SouthState's loans in North Carolina. This is today's Fed.

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December 9, 2024

First Busey $1B Bid For CrossFirst Hit by Fair Finance Watch Now Fed Asks Sealed Question

by Matthew R. Lee, Patreon Substack

FEDERAL COURT, Dec 5 – In the Midwest, Busey Bank is trying to move into the Kansas City area via merger, with a disparate lending record. Fair Finance Watch with Inner City Press on the FOIA has filed a timely first comment on, the Applications

  Van Dukeman, First Busey's CEO called it a "great fit from a cultural perspective." But consider Busey Bank's culture - including contempt for CRA, its disparate lending record:   

First Busey's Busey Bank in Illinois in 2023 - data not yet included in any CRA exam - made 1163 mortgage loans to whites, and only 772 loans to African Americans. Meanwhile it denied only 216 applications from whites, and fully 24 from African Americans. Busey Bank should be referred to DOJ. 

Busey Bank in Missouri in 2023 - data not yet included in any CRA exam - made 49 mortgage loans to whites, and only seven loans to African Americans. Meanwhile it denied only 21 applications from whites, and fully eight from African Americans 

Busey Bank in Indiana in 2023 - data not yet included in any CRA exam - made 22 mortgage loans to whites, and only two loans to African Americans.  

Busey Bank in Florida in 2023 - data not yet included in any CRA exam - made 80 mortgage loans to whites, and only ONE loan to an African American.     

Rather than provide CRA info, First Busey's Monica L. Bowe, Executive Vice President & Chief Risk Officer of First Busey Corporation - and of the Risk Management Association- submitted a letter saying CRA conditions are never attached - false, and telling.

Now after questions Busey's outside counsel has disclosed that Busey "has been the target of multiple law firms’ efforts to solicit customers via the internet to bring a mass arbitration based on overdraft and NSF fees, specifically Authorize Positive, Settle Negative and Representment fees, both of which Busey Bank stopped charging in 2022. Busey Bank first became aware of these solicitations in February, 2024. Representatives of Busey have spoken with representatives of some of these law firms and have received demands for attorneys’ fees and potential refunding of certain fees and Busey management is currently discussing the path forward with counsel."

On December the Federal Reserve cc-ed Inner City Press on its question to Busey Bank - but the question was entirely withheld.

  That's today Fed.

The merger should be denied. Watch this site.

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December 2, 2024

UMB Bank Application for Heartland Hit on Disparties Info Withheld Now Won Under FOIA

by Matthew R. Lee, Patreon Substack

SOUTH BRONX / SDNY, Nov 29 – When First Republic Bank failed / was given to JP Morgan Chase, a small list of other regional banks came into focus as in danger. Among them was UMB - a bank whose lending Inner City Press and Fair Finance Watch had been scrutinizing, and now challenge.

  UMB is asking its regulators to allow it to expand, buying Denver-based Heartland. The application, Fair Finance Watch on June 21 formally told the Fed, should not be approved.   In 2022, the most recent year for which Federal data is available, UMB Bank, N.A. made over 2000 mortgage loans to whites, and only 117 loans to African Americans.

 For every denial to an African American, it made only 2.02 loans. But for whites, for every denial it made 3.45 loans. It should be referred to DOJ.    

There is litigation, there is also this, reported at the time of Silicon Valley Bank's failure: "UMB Bank, a regional bank headquartered in Kansas City, Missouri, and with branches across the Midwest, Southwest, and Western United States, has total assets of $38 billion and deposits totaling $32 billion, according to the FDIC. However, only 16% of deposits fall under the $250,000 FDIC insurance threshold, leaving 74.11% (equivalent to $28.36 billion) vulnerable to potential losses."   

Why would regulators even consider approving its expansion? On June 21, Fair Finance Watch filed a formal Community Reinvestment Act challenge to UMB's application to the Federal Reserve, adding state by state data:

  UMB Bank in 2022 in Missouri made 842 mortgage loans to whites, and only 76 loans to African Americans. Meanwhile it denied 41 applications from African Americans, and only 257 from whites.

    UMB Bank in Colorado - in which it seeks to expand - in 2022 made 378 mortgage loans to whites, and only 13 loans to African Americans. Meanwhile it denied six applications from African Americans, and only 107 from whites.

   UMB Bank in 2022 in Texas made 78 mortgage loans to whites, and only six loans to African Americans. Meanwhile it denied two applications from African Americans, and only 27 from whites.   

  These disparities cry out for a referral to DOJ, and public hearings on, and denial of, UMB's major expansion application.

On October 11 UMB's outside counsel Davis Polk sent the Fed a response but withheld branch closing, subsidiary, fintech and crypto information from Fair Finance Watch - so Inner City Press cc-ed them on a FOIA request.

On November 29, the Fed responded with the branch closing list and more - now on Inner City Press' DocumentCloud here.

Watch this site.

***

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November 25, 2024

First Busey $1B Bid For CrossFirst Hit by Fair Finance Watch Now They Disclose Legal Threat

by Matthew R. Lee, Patreon Substack

FEDERAL COURT, Nov 20 – In the Midwest, Busey Bank is trying to move into the Kansas City area via merger, with a disparate lending record. Fair Finance Watch with Inner City Press on the FOIA has filed a timely first comment on, the Applications

  Van Dukeman, First Busey's CEO called it a "great fit from a cultural perspective." But consider Busey Bank's culture - including contempt for CRA, its disparate lending record:   

First Busey's Busey Bank in Illinois in 2023 - data not yet included in any CRA exam - made 1163 mortgage loans to whites, and only 772 loans to African Americans. Meanwhile it denied only 216 applications from whites, and fully 24 from African Americans. Busey Bank should be referred to DOJ. 

Busey Bank in Missouri in 2023 - data not yet included in any CRA exam - made 49 mortgage loans to whites, and onlyseven loans to African Americans. Meanwhile it denied only 21 applications from whites, and fully eight from African Americans 

Busey Bank in Indiana in 2023 - data not yet included in any CRA exam - made 22 mortgage loans to whites, and only two loans to African Americans.  

Busey Bank in Florida in 2023 - data not yet included in any CRA exam - made 80 mortgage loans to whites, and only ONE loan to an African American.     

Rather than provide CRA info, First Busey's Monica L. Bowe, Executive Vice President & Chief Risk Officer of First Busey Corporation - and of the Risk Management Association- submitted a letter saying CRA conditions are never attached - false, and telling.

Now after questions Busey's outside counsel has disclosed that Busey "has been the target of multiple law firms’ efforts to solicit customers via the internet to bring a mass arbitration based on overdraft and NSF fees, specifically Authorize Positive, Settle Negative and Representment fees, both of which Busey Bank stopped charging in 2022. Busey Bank first became aware of these solicitations in February, 2024. Representatives of Busey have spoken with representatives of some of these law firms and have received demands for attorneys’ fees and potential refunding of certain fees and Busey management is currently discussing the path forward with counsel."

The merger should be denied. Watch this site.

November 18, 2024

UMB Bank Application for Heartland Hit on Disparties Info Withheld Now FOIA Delay

by Matthew R. Lee, Patreon Substack

SOUTH BRONX / SDNY, Nov 12 – When First Republic Bank failed / was given to JP Morgan Chase, a small list of other regional banks came into focus as in danger. Among them was UMB - a bank whose lending Inner City Press and Fair Finance Watch had been scrutinizing, and now challenge.

  UMB is asking its regulators to allow it to expand, buying Denver-based Heartland. The application, Fair Finance Watch on June 21 formally told the Fed, should not be approved.   In 2022, the most recent year for which Federal data is available, UMB Bank, N.A. made over 2000 mortgage loans to whites, and only 117 loans to African Americans.

 For every denial to an African American, it made only 2.02 loans. But for whites, for every denial it made 3.45 loans.

On June 21, Fair Finance Watch filed a formal Community Reinvestment Act challenge to UMB's application to the Federal Reserve, adding state by state data:

  UMB Bank in 2022 in Missouri made 842 mortgage loans to whites, and only 76 loans to African Americans. Meanwhile it denied 41 applications from African Americans, and only 257 from whites.

    UMB Bank in Colorado - in which it seeks to expand - in 2022 made 378 mortgage loans to whites, and only 13 loans to African Americans. Meanwhile it denied six applications from African Americans, and only 107 from whites.

   UMB Bank in 2022 in Texas made 78 mortgage loans to whites, and only six loans to African Americans. Meanwhile it denied two applications from African Americans, and only 27 from whites.   

  These disparities cry out for a referral to DOJ, and public hearings on, and denial of, UMB's major expansion application.

On October 11 UMB's outside counsel Davis Polk sent the Fed a response but withheld branch closing, subsidiary, fintech and crypto information from Fair Finance Watch - so Inner City Press cc-ed them on a FOIA request for:

This is a formal FOIA request for the withheld exhibits to UMB's October 11 submission to the Federal Reserve in connection with its protested application to acquire Heartland Financial, in particular "Confidential" Exhibits A and B, including about fintech and branch closings and all activities engaged in by corporate subsidiaries. This is presumptively public; if any is withheld, all reasonably segregable portions should be provided.

UMB recites and responds: 1. Provide a description of the activities conducted by the following UMB subsidiaries: a. UMBCDC, Inc., Kansas City, Missouri; b. UMB Financial Services, Inc., Kansas City, Missouri; c. UMB Management Equity Holdings Inc., Kansas City, Missouri; d. UMB Merchant LLC, Kansas City, Missouri; and e. UMB Asset Management, LLC, Kansas City, Missouri The requested information is included in AIR Confidential Exhibit A. Convenience and Needs 2. Provide an update on UMB Bank’s branch consolidation analysis and confirm whether any of the branches listed in Public Exhibit 3 of the Additional Information Response, dated August 5, 2024 (“August AI Response”) would be consolidated, following consummation of the proposed transaction. The requested information is included in AIR Confidential Exhibit B.  Discuss any plans to engage in crypto-asset-related activities or fintech partnerships. The requested information is included in AIR Confidential Exhibit A.   

Again, this is both important for the public to know and is presumptively public; if any is withheld, all reasonably segregable portions should be provided.

On November 12 - a month after the request - the Fed wrote that it was unilaterally extending its time to respond to November 26.

Watch this site.

***

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November 11, 2024

First Busey $1B Bid For CrossFirst Hit by Fair Finance Watch Info Hidden Now FOIA Delay

by Matthew R. Lee, Patreon Substack

FEDERAL COURT, Nov 4 – In the Midwest, Busey Bank is trying to move into the Kansas City area via merger, with a disparate lending record. Fair Finance Watch with Inner City Press on the FOIA has filed a timely first comment on, the Applications

  Van Dukeman, First Busey's CEO called it a "great fit from a cultural perspective." But consider Busey Bank's culture - including contempt for CRA, its disparate lending record:   

First Busey's Busey Bank in Illinois in 2023 - data not yet included in any CRA exam - made 1163 mortgage loans to whites, and only 772 loans to African Americans. Meanwhile it denied only 216 applications from whites, and fully 24 from African Americans. Busey Bank should be referred to DOJ. 

Busey Bank in Missouri in 2023 - data not yet included in any CRA exam - made 49 mortgage loans to whites, and onlyseven loans to African Americans. Meanwhile it denied only 21 applications from whites, and fully eight from African Americans 

Busey Bank in Indiana in 2023 - data not yet included in any CRA exam - made 22 mortgage loans to whites, and only two loans to African Americans.  

Busey Bank in Florida in 2023 - data not yet included in any CRA exam - made 80 mortgage loans to whites, and only ONE loan to an African American.     

There is litigation, for example under the FCRA, here - dropped without explanation, presumable settled, the FRB should ask First Busey about all outstanding consumer litigation. 

And there was the First Busey board member, Elisabeth Kimmel, caught in the college admissions scandal, here.

When the Fed provided the application, the banks had withheld their CRA data. So, "This is a formal FOIA request for the withheld exhibits to the First Busey / CrossFirst application, in particular "Confidential" Exhibits 9 ("First Busey Community Reinvestment Act Data") and 10 ("CrossFirst Community Reinvestment Act data"). This is presumptively public."

Rather than provide the CRA info, First Busey's Monica L. Bowe, Executive Vice President & Chief Risk Officer of First Busey Corporation - and of the Risk Management Association- submitted a letter saying CRA conditions are never attached - false, and telling.

Inner City Press' FOIA request? The Fed on November 4 extended its time to reply - and unlike other less arrogant banks, First Busey has provided nothing. Watch this site.

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November 4, 2024

Today's FRB gives out gifts to redliners in secret. Consider: St. Louis German American Bancorp, Inc., Jasper, Indiana—waiver of application to acquire Heartland BancCorp, Whitehall, Ohio, and simultaneously merge Heartland Bank, Whitehall, Ohio, with and into German American Bank, Jasper, Indiana. Granted: October 22, 2024

From September, ongoing: Fair Finance Watch has been concerned for some time with German American Bank's outreach / image and lending. In Indiana in 2023 - in HMDA data not yet taken into account in any CRA exam - German American Bank based on its marketing made 1743 mortgage loans to whites, and only SIXTEEN loans to African Americans. Meanwhile it denied 11 applications from African Americans, and only 356 from whites

October 28, 2024

From the FRB of Chicago: "Dear Matthew: This is in reference to the filing by First Busey Corporation, Champaign, Illinois, to merge with CrossFirst Bankshares, Inc., Leawood, Kansas (“Applicant”), and thereby indirectly acquire CrossFirst Bank, Leawood, Kansas. This will acknowledge receipt of your comment email dated October 15, 2024. Your comment has been accepted by the Federal Reserve Bank of Chicago (“Reserve Bank”) relative to this filing and will be made a part of the record. A copy of your comment has been forwarded to Applicant for an opportunity to respond and if Applicant responds, you will be provided a copy of the response. To the extent the comment letter and request for a hearing dated October 15, 2024, also seeks records under the Freedom of Information Act (“FOIA”), it does not comply with section 261.11(a)(2) of the Board’s Rules relating to the submission of FOIA requests because you have combined a request for records with comments on an application and a hearing request, 12 CFR 261.11(a)(2). This correspondence, therefore, will not be processed as a FOIA request. Accordingly, if you seek information under the FOIA, you may submit a separate request to the Board’s Freedom of Information Office that complies with the requirements of section 261.11 of the Board’s Rules."

  But on FOIA requests, even when the Board grants expedited processing, no records are received on a timely basis...

October 21, 2024

Expedited? From the Fed: This is in response to your electronic message dated and received by the Board on October 11, 2024. Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request:  the withheld exhibits to UMB’s October 11 submission to the Federal Reserve in connection with its protested application to acquire Heartland Financial, in particular “Confidential” Exhibits A and B, including about fintech and branch closings and all activities engaged in by corporate subsidiaries. You have requested expedited processing ...  I have determined to grant your request for expedited processing because (1) you are primarily engaged in disseminating information, and (2) the application you seek is pending with the Board. Accordingly, your request will be processed as soon as practicable and ahead of other FOIA requests.

  We'll see.

October 14, 2024

 On First Busey, Inner City Press has been granted expedited processing: "I have determined to grant your request for expedited processing because (1) you are primarily engaged in disseminating information, and (2) the application you seek is open for" comment...

October 7, 2024

First Busey $1B Bid For CrossFirst Hit by Fair Finance Watch As CRA Exhibits Withheld

by Matthew R. Lee, Patreon Substack

FEDERAL COURT, Oct 4 – In the Midwest, Busey Bank is trying to move into the Kansas City area via merger, with a disparate lending record. Fair Finance Watch with Inner City Press on the FOIA has filed a timely first comment on, the Applications

  Van Dukeman, First Busey's CEO called it a "great fit from a cultural perspective." But consider Busey Bank's culture, its disparate lending record:   

First Busey's Busey Bank in Illinois in 2023 - data not yet included in any CRA exam - made 1163 mortgage loans to whites, and only 772 loans to African Americans. Meanwhile it denied only 216 applications from whites, and fully 24 from African Americans. Busey Bank should be referred to DOJ. 

Busey Bank in Missouri in 2023 - data not yet included in any CRA exam - made 49 mortgage loans to whites, and onlyseven loans to African Americans. Meanwhile it denied only 21 applications from whites, and fully eight from African Americans 

Busey Bank in Indiana in 2023 - data not yet included in any CRA exam - made 22 mortgage loans to whites, and only two loans to African Americans.  

Busey Bank in Florida in 2023 - data not yet included in any CRA exam - made 80 mortgage loans to whites, and only ONE loan to an African American.     

There is litigation, for example under the FCRA, here - dropped without explanation, presumable settled, the FRB should ask First Busey about all outstanding consumer litigation. 

And there was the First Busey board member, Elisabeth Kimmel, caught in the college admissions scandal, here.

When the Fed provided the application, the banks had withheld their CRA data. So, "This is a formal FOIA request for the withheld exhibits to the First Busey / CrossFirst application, in particular "Confidential" Exhibits 9 ("First Busey Community Reinvestment Act Data") and 10 ("CrossFirst Community Reinvestment Act data"). This is presumptively public." Watch this site.

***

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September 30, 2024

The Fed has granted expedited processing, they say, to Inner City Press' SouthState FOIA - but still no documents...

September 23, 2024

SouthState Lending Disparities Triggered CRA Challenge Now after FOIA Withheld Exhibit 18

by Matthew R. Lee, Patreon Substack

SOUTH BRONX / SDNY, Sept 19 – When First Republic Bank failed / was given to JP Morgan Chase, a small list of other regional banks came into focus as in danger, banks whose lending Inner City Press and Fair Finance Watch had been scrutinizing, even more so that the 2023 data is out.

  This week Inner City Press filed with the Fed, a timely first comment on, the Applications of SouthState Corporation to merge with Independent Bank Group, Inc., and Independent Bank.  

  SouthState in South Carolina in 2023 - data not yet included in any CRA exam - made 5013 mortgage loans to whites, and only 228 loans to African Americans. Meanwhile it denied only 670 applications from whites, and fully 195 from African Americans. SouthState should be referred to DOJ.  

  SouthState in North Carolina in 2023 - data not yet included in any CRA exam - made 1334 mortgage loans to whites, and only FIFTY SEVEN loans to African Americans. Meanwhile it denied only 173 applications from whites, and fully 20 from African Americans. 

  SouthState in Georgia in 2023 - data not yet included in any CRA exam - made 1176 mortgage loans to whites, and only 318 loans to African Americans. Meanwhile it denied only 304 applications from whites, and fully 88 from African Americans.  

 Nationwide in 2023, SouthState made 7798 mortgage loans to whites, and only 947 loans to African Americans. Meanwhile it denied only 2491 applications from whites, and fully 558 from African Americans.  

  Why would regulators even consider approving its expansion? 

On August 9, SouthState submitted to the Fed a response - that deals only with Independent Bank.

On September 18, the Fed asked SouthState questions including "Confirm that no consumer products or community development programs or services offered by either organization will be discontinued by the combined organization as a result of the proposed transaction, other than those identified in Confidential Exhibit 18 to the application."

Inner City Press has submitted a FOIA request with the Fed for that obviously CRA-material Exhibits.

  No thanks to the Fed, Inner City Press got the exhibit - SouthState just withdrew its request for confidential treatment, of this: "CONFIDENTIAL  SouthState Bank, N.A. Independent Bank  Discontinued Independent Bank Products and Services  June 2024  SSC and IBTX currently plan on discontinuing Independent Bank’s mortgage warehouse program and selling its Shared National Credits (SNC) portfolio. Almost all purchased SNCs are in Independent Bank’s commercial loan portfolio, with the largest single industry concentration in energy."

 Inner City Press is requesting an extension of the public comment period, public / virtual evidentiary hearings and that, on the current record, the applications not be approved

***

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September 16, 2024

The Fed is a paper tiger? Not only still nothing on the Porticoes application - on September 11 the Fed issued an enforcement action against Fieldpoint, which immediately put out "“We have a strong partnership with our regulators,” said H. Russell Holland, President and CEO of Fieldpoint Private. "Private Holdings, Inc., is the holding company of Fieldpoint Private Bank & Trust, a boutique private banking firm headquartered in Greenwich, Connecticut, with offices in New York City, Atlanta and Orlando/Winter Park. Fieldpoint Private was established at the onset of the Great Financial Crisis by 31 individuals, including former Chairmen and CEOs of some of the most well-known and successful financial and consumer firms in America."

September 9, 2024

  More from the FRB Chicago, but from FRBNY, *still* nothing on the Porticoes application...

September 2, 2024

The Fed *still* hasn't sent the request Porticoes / "blank check" bank application. But from the FRB Chicago, this: "Pursuant to your email request, attached is the public portion of the below filing:      ChoiceOne Financial Services, Inc., Sparta, Michigan to merge with Fentura Financial, Inc., and thereby indirectly acquire The State Bank, both of Fenton, Michigan    Please confirm receipt of this email after verifying that the document could be opened." We confirmed; OOO

August 26, 2024

And SouthState's response - much of it confined to a "Confidential" exhibit:


Provide the IBTX Disclosure Schedule referenced in the Merger Agreement. A copy of the IBTX Disclosure Schedule is attached as Confidential Exhibit 1. 3. Describe in greater detail the purpose and activities of the various trusts held by SouthState and IBTX that are described in the application. Both SouthState and IBTX have formed or acquired statutory business trusts (the “Trusts”) for the purpose of issuing trust preferred securities to investors. These entities do not otherwise conduct any business activities. Each of the Trusts has issued capital and common securities and invested the proceeds thereof in an equivalent amount of junior subordinated debentures (the “Debentures”) issued by either SouthState or IBTX. The interest rate payable on and the payment terms of the Debentures are the same as the distribution rate and payment terms of the respective issues of capital and common securities issued by the Trusts. The Debentures are subordinated and junior in right of payment to all present and future senior indebtedness. SouthState and IBTX have fully and unconditionally guaranteed the obligations of their respective Trusts with respect to the capital and common securities. Except under certain circumstances, the common securities issued to SouthState or IBTX by their respective Trusts possess sole voting rights with respect to matters involving those entities. Under certain circumstances, SouthState and IBTX may, from time to time, defer the debentures' interest payments, which would result in a deferral of distribution payments on the related trust preferred securities. The Debentures are callable after five years from the date of issuance, therefore all Debentures formed or acquired by SouthState and IBTX are callable as of June 30, 2024. SouthState and IBTX have $118.6 million and $57.3 million of Debentures, respectively, outstanding as of June 30, 2024. It is SouthState’s intent to assume all Trusts outstanding at IBTX and treat the Debentures as Tier 2 capital for regulatory capital purposes. 4. Indicate whether SouthState or any of its subsidiaries are subject to any state community reinvestment laws. If applicable, explain how the proposed transaction complies with such law(s). SouthState confirms that neither SouthState nor any of its subsidiaries are subject to any state community reinvestment laws. 5. Confidential Appendix. For our responses to the information requested in the Confidential Appendix of the AIR, please see the Confidential Annex, which also contains Confidential Exhibits 1 and 2.

August 19, 2024

The Fed has asked SouthState, "4. Indicate whether SouthState or any of its subsidiaries are subject to any state community reinvestment laws. If applicable, explain how the proposed transaction complies with such law(s)." That's it?

August 12, 2024

Back on June 26 on a smaller merger, Inner City Press requested records - and was granted expedited treatment, explicitly with reference to the July 25 expiration of the public comment period. But no records were given - and on July 26, this: "Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until August 9, 2024, in order to consult with two or more components of the Board having a substantial interest in the determination of the request." And no response to the timely request to exetnd the comment period...

But even on August 9 by 10 pm, no documents, nothing. Meanwhile the underlying bank urges delegated rubber stamp. This is today's Fed.

August 5, 2024

On July 26, after a FOIA appeal - and after closing the public comment period - the OCC belatedly gave Inner City Press documents showing Capital One briefed the OCC on a "big" deal in November 2023; it was code named "Project Sirius."

Then overly chummy texts from Andy Navarrete, who testified at the public meeting, and Pient Tran to the OCC's Marci Heppner and others.

For example, Andy to Marci, sorry for the late ping, if Richard wanted to call, could you do a 1:1 Zoom at 7:30 [pm]. But of course. That and more now on Inner City Press' DocumentCloud here

  On July 24, the very day on which the OCC and Fed said they were closing the written comment period, the OCC upheld in full its FOIA denials, determination letter on Inner City Press' Document Cloud here. Inner City Press has requested an extension of the comment periods - the Fed hasn't even responded. When did the Fed start secret talks with Capital One?

July 29, 2024

The Fed's FOIA scam is no limited to Capital One / Discovery. On June 26 on a smaller merger, Inner City Press requested records - and was granted expedited treatment, explicitly with reference to the July 25 expiration of the public comment period. But no records were given - and on July 26, this: "Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until August 9, 2024, in order to consult with two or more components of the Board having a substantial interest in the determination of the request." And no response to the timely request to exetnd the comment period...

July 22, 2024

From Testimony Opposing Capital One's Bid to Acquire Discover  July 18, 2024  

  The day the banks announced the proposed merger, Inner City Press submitted Freedom of Information Act requests to both the Federal Reserve and the Office of the Comptroller of the Currency.      The Fed, as has become a pattern, granted Inner City Press' FOIA request expedited treatment - and then did not provide any of the responsive documents, claiming it needed more time.

July 15, 2024

On Capital One Discover 3 Minutes Each OCC Withholds 185 Pages Inner City Press Appeals - Still Nothing from the Fed

by Matthew R. Lee

SOUTH BRONX, July 9 – Capital One has applied to buy Discover, in an anticompetitive deal that should be rejected by regulators if they mean what they have been saying. After they applied late March 20,  Inner City Press submitted a second Freedom of Information Act request to the Office of the Comptroller of the Currency (and to the Federal Reserve).

On May 14 - still without providing FOIA documents - the OCC and Fed set a July 19 virtual public meeting.

On June 25 the OCC belatedly responded to Inner City Press' FOIA request - by withholding in full 185 pages. OCC FOIA production on DocumentCloud here. Inner City Press appealed.

At the July 19 public meeting, "each speaker will be allotted three minutes to speak at the meeting," the OCC and Fed on July 9 said.

Meanwhile Capitol One lobbying continues, for example with a Pennsylvania state legislator extolling Capital One's  subprime, here.

July 8, 2024

  Now belatedly the Federal Reserve has fined Silvergate $43 million - previously,

Inner City Press submitted to the Federal Reserve a Freedom of Information Act request including: "This is a FOIA request for all record regarding the FRS' approval for the application / request for membership in the Federal Reserve System by Farmington State Bank (giving rise to FRBSF president Daly's approval on a delegated basis in 2021), and the subsequent renaming of the bank to Mooonstone and taking of a stake by FTX/Alameda.  Also, for Silvergate with its FTX connections, record reflecting any review by the FRS of Silvergate's (and Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank, Customers Bancorp Inc.) of the banks' connections with crypto-currency firms... This is a request for expedited treatment, in light of the indictment of FTX / Alameda's Sam Bankman-Fried and Caroline Ellison (cooperating), and an upcoming January 3, 2023 hearing."

The Federal Reserve has so far acknowledged receipt: "Your request has been assigned number FOIA-2023-00178. Please reference this number in all future correspondence.    Request description:  This is a FOIA request for all record regarding the FRS' approval for the application / request for membership in the Federal Reserve System by Farmington State Bank [also] any review by the FRS of Silvergate's (and Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank, Customers Bancorp Inc.) of the banks' connections with crypto-currency firms."

There is also a lawsuit in Federal court in California asserting that 

 "Silvergate, a publicly traded and federally regulated bank catering to cryptocurrency customers, maintained both FTX and Alameda accounts. It directly aided and abetted FTX’s fraud and breaches of fiduciary duty via first-hand participation in the commingling of funds, improper transfers, and lending out of customer money. Silvergate processed billions in transfers from FTX’s client account at Silvergate to the Alameda accounts. Silvergate also accepted deposits from FTX investors—intended to be stored, traded, or cashed out—that at Bankman-Fried’s direction were wired straight to Alameda bank accounts and misused."

July 1, 2024

  Governor Bowman on June 27, thou dost protest too much: The processing timelines we see also seem inconsistent with a process that is operating truly as a rubber stamp. To be clear, I think we have room to do better when it comes to timely regulatory action, while maintaining a rigorous review of applications. But extended review periods are not uncommon, particularly when you include preliminary discussions and pre-filings with regulators in the published processing timelines.

June 24, 2024

Bowman in Salzburg: "Regulators must also understand, to the extent possible, the consequences of specific innovations. Take, for example, the increasing interest in tokenization. There is a risk that tokenized products and platforms could duplicate existing bank deposits and payment rails, potentially creating parallel systems. How would these parallel systems interact with, or even replace, current systems? Will the products and platforms that duplicate these deposit and payment functions provide the same legal protections for customers and the overall financial system that they currently receive?" Crypto....

June 17, 2024

While we *still* wait for documents under FOIA request purported to approve for expedited treatment, this: "Dear Matthew,  We appreciate your interest in watching and testifying at the public meeting regarding the proposal by Capital One Financial Corporation, McLean, Virginia, to acquire Discover Financial Services, Riverwoods, Illinois, pursuant to the Bank Holding Company Act; and to merge Discover Bank, Greenwood, Delaware, into Capital One, National Association, McLean, Virginia, pursuant to the Bank Merger Act. The public meeting will start at 9:00 a.m. ET on Friday, July 19, 2024, and will be hosted virtually on an online meeting platform. The Federal Reserve Board and the Office of the Comptroller of the Currency have received your request to testify and are reviewing your request." Reviewing?

June 10, 2024

This month Inner City Press has received two letters from the FRB-Dallas, one responding to CRA protest filed in March, and only now transferred from FRB-KC to Dallas (but not the Board?) and the other to the Board. Why the delay?

June 3, 2024

Conflict of interest? Revolving door? "Numisma Bank in Greenwich, Conn., has received conditional approval for a Federal Reserve master account. Numisma, which focuses on banknote distribution, is a tier 3 institution that is state-chartered but isn’t backed by the Federal Deposit Insurance Corp.  The Fed has rejected applications by other financial institutions, including Custodia Bank and The Narrow Bank, on the grounds that granting access would present an “undue risk.” NOTE: Numisma was co-founded by former Fed Vice Chair for Supervision Randal Quarles...

May 27, 2024

Fed sez: SVB lost $40 billion in deposits in a single day, with management expecting $100 billion more in outflows the next day. Together, these outflows represented about 85 percent of the bank's deposits. In contrast, both the failure of Wachovia and Washington Mutual in 2008 involved less severe outflows that evolved over more than a week (the failure of Wachovia in 2008 included about $10 billion in outflows over 8 days while the failure of Washington Mutual in 2008 included outflows of $19 billion over 16 days). Return to text 4. Signature Bank received in one day more than 1,600 withdrawal requests totaling approximately $18.6 billion, representing 20 percent of its deposits. Return to text 5. First Republic lost around 20 percent of its deposits in a single day

May 20, 2024

Capital One Should Discover Merger Dead July 19 Public Meeting Inner City Press FOIAed Fed

by Matthew R. Lee

SOUTH BRONX, May 14 – Capital One has applied to buy Discover, in an anticompetitive deal that should be rejected by regulators if they mean what they have been saying. While they applied late March 20, as of 1 pm on March 22 there was no notice of the Federal Reserve's or OCC's websites. Inner City Press submitted second FOIA requests to each agency. Public hearings should be held, not only on antitrust but also lending disparities at both companies. 

 On April 24 the Fed extended its comment period to May 31 - without (yet?) granting public hearings, nor providing the FOIA documents.

On May 14 - still without providing FOIA documents - the Fed and OCC set a July 19 virtual public meeting: "The public meeting will be held virtually on July 19, 2024, at 9:00 a.m. EDT. Members of the public seeking to present oral comments must register by 12:00 p.m. EDT on June 28, 2024, through the online registration webpage, which will be posted on the Board's Capital One-Discover Application Reading Room by May 28, 2024."

On April 19  the Fed wrote to extended its time to respond to Inner City Press' February 19 FOIA to May 3

  The OCC first put its application in its reading room. And it is an outrage, Capital One gaming the CRA system. For example "the Proposed Transaction would result in CONA establishing a new assessment area in  Delaware, which will include all census tracts in Sussex County and seven contiguous census  tracts in Kent County."

That for a nationwide card and subprime auto lender...

 As documented by Fair Finance Watch, Discover Bank in 2022 denied mortgage loans application from African Americans more than twice as frequently as those of whites. 

  Previously, Inner City Press and NCRC challenged Capital One's acquisition of ING Direct, see here.This time, given the antitrust enforcement claims being made in DC, this proposal should be dead in the water. Watch this site. 

***

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May 13, 2024

Fed Disappeared CRA Linkbancorp Condition on Approval Now NJ Branches out of CRA

By Matthew Russell Lee, Patreon Maxwell Book

SOUTH BRONX, May 10 – The Federal Reserve Board in considering the proposed merger on the rebound between New York-based Link Bank and Partners Bancorp omitted at the eleventh hour - or apparently the thirteenth hour - language about a Community Reinvestment Act condition imposed by the FDIC.

  Now the Fed and its Governors have been asked Why - and when.

Inner City Press and Fair Finance Watch have long exposed redlining - and in this vein, on May 6 they filed a Community Reinvestment Act challenge with the FDIC and Federal Reserve.

  In October, the FDIC required from LINKBANK a plan to improve its lending to African Americans, which Inner City Press has published on its DocumentCloud here.

But Link kept spinning, issuing a press release about these partial approvals without mentioning the condition, and concluding it "remains subject to the approval of the Board of Governors of the Federal Reserve System and other customary closing conditions. LINK anticipates closing the Merger in the fourth quarter of 2023." We asked, How do they know?

 Well, they know that the Fed has boiler plate ready, ready to say it is concerned with HMDA disparities without acting on them, ready to say they conferred with the FDIC without acknowledging the condition the FDIC required.

The "Corrected" Fed approval emailed to Inner City Press on November 16 did not acknowledge the CRA condition. But the approval order first posted - and voted on?- did. We on November 16 filed:

Dear Chair Powell, Secretary Misback and others in the FRS:   This is a formal request for reconsideration under 12 CFR Part 262.3(k) of the Board's "corrected" -- dropping the  reference to FDIC's CRA Condition - Approval of the above-captioned applications by LINKBANCORP, Inc..  

  The Board's website currently says, of this order, that "Note: The initial version of this order was incorrect and inadvertently posted. A corrected version was posted on November 15, 2023."   

 Meanwhile, Deputy Associate Secretary Fennell's letter to me dated November 16 states that "today the Board of Governors of the Federal Reserve System has approved the proposal." If the approval was "today" / November 16, how was it corrected on November 15? The copy emailed to us on November 16 is entitled "Corrected."

   It's worse, much worse. The original (real? approved?) version of the order stated  "The FDIC’s approval of the merger of Bank with the Bank of Delmarva and Virginia Partners Bank includes a condition requiring the resultant institution to develop an action plan, including a marketing plan and additional outreach, to be submitted to the FDIC for approval, for monitoring and improving the extent of home mortgage applications from, and originations to, African American applicants in the resultant institution’s assessment areas. This condition will help ensure that the resultant institution continues to help in meeting the credit needs of the African American population in the resultant institution’s assessment areas."  

  It is true that the FDIC imposed a CRA condition, after receiving comments from Fair Finance Watch / Inner City Press. The FDIC sent the order with condition to us and we posted it online.

   So why - and when - did the Federal Reserve, which claims to have conferred with the FDIC as primary supervisor, abruptly take out of its already-posted approval order the language about the CRA condition? Was it after the Board's approval? Who decided that the CRA condition language should be removed? Why? To make it unenforceable?  

 The "corrected" approval order, with the CRA language removed, is said to be:  "Voting for this action: Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Barr, Governors Bowman, Waller, Cook, and Kugler." When did each vote? Were they made aware of, and is each Governor responsible for, the removal of the CRA condition language?  

  These are clearly facts that we could not present during the official comment period, or even prior to approval (or at least, "correction").    And they militate for reconsideration, for airing to each Governor and an explanation, given the Governors' claims and statements about their commitment to CRA.

On  November 21 past 5 pm, a Federal Reserve staff attorney left Inner City Press a voicemail reading a script that the Fed General Counsel - without showing even this to the Board members - determined there was nothing new in the request. But Inner City Press didn't know about the removal of the condition language until after the Fed said it approved it - it could NOT have been shown before. UNreal. And the new(ish) Governnors? What do they think or do?

We still don't know. But now LINKBANCORP is selling branches that it acquired to a credit union, American Heritage Credit Union, and thereby taking more than $100 million of deposits out from the Community Reinvestment Act. We'll stay on this

May 6, 2024

Bowman watch, May 3 she said "the inflow of new immigrants to some geographic areas could result in upward pressure on rents, as additional housing supply may take time to materialize."

April 29, 2024

Capital One Should Discover Merger Dead FRB Extends to May 31 Inner City Press FOIAed Fed

by Matthew R. Lee

SOUTH BRONX, April 24 – Capital One has applied to buy Discover, in an anticompetitive deal that should be rejected by regulators if they mean what they have been saying. While they applied late March 20, as of 1 pm on March 22 there was no notice of the Federal Reserve's or OCC's websites. Inner City Press submitted second FOIA requests to each agency. Public hearings should be held, not only on antitrust but also lending disparities at both companies. 

 On April 24 the Fed extended its comment period to May 31 - without (yet?) granting public hearings, nor providing the FOIA documents.

On April 19  the Fed wrote to extended its time to respond to Inner City Press' February 19 FOIA to May 3

April 22, 2024

Capital One Should Discover Merger Dead Inner City Press FOIAed Fed Now Delay to May 3

by Matthew R. Lee

SOUTH BRONX, April 19 – ...On April 19, with the Fed's comment period coming to a close, the Fed wrote to extended its time to respond to Inner City Press' February 19 FOIA to May 3 - AFTER the close of the comment period.

 As documented by Fair Finance Watch, Discover Bank in 2022 denied mortgage loans application from African Americans more than twice as frequently as those of whites. 

  Previously, Inner City Press and NCRC challenged Capital One's acquisition of ING Direct, see here.This time, given the antitrust enforcement claims being made in DC, this proposal should be dead in the water. Watch this site.

April 15, 2024

Fair lending be damned? On April 11, 2024, the Fed hauled off and approved, noting Inner City Press / Fair Finance Watch "objected to the proposal, alleging that in 2021, Provident Bank and Lakeland Bank made no home loans to African American individuals in New York State.30 30  The data cited by the commenter corresponds to publicly available 2021 data by Provident Bank and Lakeland Bank under HMDA. Following consummation of the proposed transaction, the combined organization will add to its assessment area Bronx and Kings counties, each of which includes a significant number of majority-minority and LMI communities... The Board also has considered the DOJ Consent Order, including Lakeland Bank’s efforts towards meeting its obligations under the DOJ Consent Order, and that the DOJ Consent Order binds Provident without further action by the Board." We'll see.

April 8, 2024

Capital One Should Discover Merger Dead As Inner City Press FOIAs Fed Barr Talks Basel 3

by Matthew R. Lee

SOUTH BRONX, April 3 – Capital One has applied to buy Discover, in an anticompetitive deal that should be rejected by regulators if they mean what they have been saying. While they applied late March 20, as of 1 pm on March 22 there was no notice of the Federal Reserve's or OCC's websites. Inner City Press submitted second FOIA requests to each agency. Public hearings should be held, not only on antitrust but also lending disparities at both companies. 

  While the OCC has yet to provide some records requested under FOIA, it put its application in its reading room. And it is an outrage, Capital One gaming the CRA system. For example "the Proposed Transaction would result in CONA establishing a new assessment area in  Delaware, which will include all census tracts in Sussex County and seven contiguous census  tracts in Kent County."

That for a nationwide card and subprime auto lender...

  Still no records from the Fed, so this:

This is a FOIA request for the entirety of Capital One's applications for regulatory approval of its Discover proposal, including all portions for which Capital One has requested confidential treatment, and all communications by your agency with the banks since February 19. As of March 22 at 1 am, the Fed's most recent H2A is from March 15

 As documented by Fair Finance Watch, Discover Bank in 2022 denied mortgage loans application from African Americans more than twice as frequently as those of whites. 

  Previously, Inner City Press and NCRC challenged Capital One's acquisition of ING Direct, see here.This time, given the antitrust enforcement claims being made in DC, this proposal should be dead in the water.

On April 3 speaking at NCRC's Just Economy conference Barr said the Fed will not follow the OCC and FDIC with merger processing reform proposals; then he walked Basel III endgame but not explanation why the Fed can't or won't give Capital One documents requested on Feb 19, as to which they purported to grant expedited processing. Watch this site.

April 1, 2024

On the Capital One / Discover merger application, the Fed has granted Inner City Press expedited FOIA processing - but as of March 29 had not provided a single document....

March 25, 2024

Backsliding? The Fed and the other agencies "extended the applicability date of the facility-based assessment areas and public file provisions from April 1, 2024, to January 1, 2026. Therefore, banks will not have to make changes to their assessment areas or their public files as a result of the 2023 CRA final rule until January 1, 2026." Meanwhile the Fed had not provided a single record, as of March 23, in response to Inner City Press' February 19 FOIA request about Capital One / Discover...

March 18, 2024

 "The Federal Reserve Board on Thursday issued an enforcement action against JPMorgan Chase & Co. and fined the firm approximately $98.2 million for an inadequate program to monitor firm and client trading activities for market misconduct. The Board's action requires JPMorgan Chase to review and take corrective action to address the firm's inadequate monitoring practices, which occurred between 2014 and 2023" - but how many of JPM Chase's acquisition has the Fed rubber stamped during the time period?

March 11, 2024

Governon Bowman in New Jersey on March 7 bemoaned that "policy reforms may make bank M&A transactions more difficult for regulators to approve and slow the application processing timeline."

March 4, 2024

The Federal Reserve is getting worse and worse on FOIA, including on banks sued by DOJ for discrimination. They wrote to Inner City Press, you requested "the two exhibits withheld in full by Provident Financial Services,  Inc., Jersey City, New Jersey in its January 18, 2024 Additional  Information response in connection its pending application to  acquire Lakeland Bancorp, Inc., Oak Ridge, New Jersey, and  thereby indirectly acquire Lakeland Bank …. Staff searched Board records and located the documents that are responsive to  your request. I have determined, however, that the withheld portions of the January 18,  2024, Additional Information submission that are responsive to your request contain  confidential commercial and financial information (e.g., nonpublic business plans and  strategies concerning compliance and lending). This information is subject to  withholding and will be withheld from you pursuant to Exemption 4 of the FOIA, 5  U.S.C. § 552(b)(4). I have also determined that the information should be withheld  because it is reasonably foreseeable that disclosure would harm an interest protected by  an exemption described in subsection (b) of the FOIA, 5 U.S.C. § 552(b). The responsive  documents have been reviewed under the requirements of subsection (b), but no  reasonably segregable nonexempt information was found. Accordingly, approximately  18 pages of information will be withheld from you in full." In full...

February 26, 2024

The Fed just keeps extending its time on FOIA, and not only on Capital One / Discover: On February 20: "This is in response to your electronic message dated January 19, 2024, and received by the Board’s Information Disclosure Section on January 22. Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request: the two exhibits withheld in full by Provident Financial Services, Inc., Jersey City, New Jersey in its January 18, 2024 Additional Information response in connection its pending application to acquire Lakeland Bancorp, Inc., Oak Ridge, New Jersey, and thereby indirectly acquire Lakeland Bank, which recently settled lending discrimination charges with DOJ[.] Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until March 5, 2024, 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 March 5, 2024, we will respond to you promptly." Yeah.

February 19, 2024

  Here's a question: What may have been the role of a Federal Reserve Governor in the lawsuit against the CRA regulation?

February 12, 2024

Before FNB Settled on Fair Lending Its Yadkin Merger Was Challenged But Fed Approved It

by Matthew Russell Lee, Patreon Book Substack

SOUTH BRONX, NY Feb 5 – When First National Bank of Pennsylvania applied to the Federal Reserve to buy Yadkin bank in North Carolina, Fair Finance Watch challenged it on Community Reinvestment Act and fair lending grounds.  

 The Federal Reserve, as usually, rubber stamped the merger.   Now in February 2024 the Justice Department had sued and settled with FNB on fair lending grounds.

Inner City Press had wanted to ask DOJ about the Fed (including in its recent Patriot Bank action), but has been unable so far.  Watch this site

February 5, 2024

On January 19 Inner City Press submitted a FOIA request; on January 31 the Federal Reserve wrote back: Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request: the two exhibits withheld in full by Provident Financial Services, Inc., Jersey City, New Jersey in its January 18, 2024 Additional Information response in connection its pending application to acquire Lakeland Bancorp, Inc., Oak Ridge, New Jersey, and thereby indirectly acquire Lakeland Bank, which recently settled lending discrimination charges with DOJ[.] You also seek expedited processing for your request. In support of your request for expedited treatment, you state that “[t]his information was submitted, unilaterally withheld in full, late in the application process – there is a need to release it for public knowledge BEFORE the Board acts on the application.”  I have determined to grant your request for expedited processing. Accordingly, your request will be processed as soon as practicable and ahead of other FOIA requests." But still no documents...

January 29, 2024

  What is happening to the Federal Reserve? Beyond misrating Patriot Bank just before its DOJ redlining settlement, how the Fed is withholding info about its inquiry into Lakeland Bank's discrimination deal. Ten days ago - with no documents yet - Inner City Press / Fair Finance Watch FOIA-ed the Fed: "This is a formal FOIA request for the two exhibits withheld in full by Provident Financial Services, Inc., Jersey City, New Jersey in its January 18, 2024 Additional Information response in connection its pending application  to acquire Lakeland Bancorp, Inc., Oak Ridge, New Jersey, and thereby indirectly acquire Lakeland Bank, which recently settled lending discrimination charges with DOJ   The January 18 response recites then states: Provide an update to all action items included in the Consent Order, reflecting those items which have been completed and any other pertinent updates, including, but not limited to, the status of any deliverables required under the Consent Order that have not yet been completed. Please refer to the attached Confidential Exhibit 1 for a response to this Item.   The entire response is withheld, about fair lending compliance, including public commitments that are unfulfilled. This cannot stand; the information must be provided before the Board acts in any way on the application (other than denial.)

January 22, 2024


Lakeland Bank DOJ Deal Left Disparities So Protest & Fed Asks of DOJ Settlement Withheld

by Matthew Russell Lee, Patreon Book Substack

SOUTH BRONX, NY, Jan 19 – When the US Department of Justice sued and immediately settled with Lakeland Bank for fair lending violations, it announced a proposed merger with Provident Bank.

As if to sweep it under the carpet.

And when Fair Finance Watch looked into it, it found that the DOJ settlement did not address in any way the banks' disparities in New York. So on December 1, the FDIC's comment deadline, it filed a protest, with Inner City Press on the FOIA.

Jump cut to March 15, 2023, when Provident's Deputy General Counsel filed a letter with the New York Fed, cc-ing Rodgin Cohen - only on New Jersey, nothing on the disparities in New York.

On January 18 Provident asked two Board questions - by withholding the entire answers. Inner City Press immediately FOIAed: " The January 18 response recites then states: Provide an update to all action items included in the Consent Order, reflecting those items which have been completed and any other pertinent updates, including, but not limited to, the status of any deliverables required under the Consent Order that have not yet been completed. Please refer to the attached Confidential Exhibit 1 for a response to this Item.   The entire response is withheld, about fair lending compliance, including public commitments that are unfulfilled. This cannot stand; the information must be provided before the Board acts in any way on the application (other than denial.)  Inner City Press / Fair Finance Watch is a timely protestant to the application; this is also again request that the FRB begin putting all applications online, since the Fed has a new electronic system for applicants. What is the rationale for not doing this, and allowing for delay for the public and community organizations? In these contexts, this comment period should be extended."

Watch this site.

January 15, 2024

This is what the Fed is focused on: The Federal Reserve Board on Thursday announced the execution of the enforcement actions listed below:  Consent prohibition order against John Freeze Former employee of Bank of Jackson Hole, Jackson, Wyoming Misappropriation of documents, including confidential supervisory information  Consent cease and desist order and civil money penalty against Randy Johnson Former employee of Farmers and Merchants Savings Bank, Manchester, Iowa Misappropriation of confidential bank records

January 8, 2024

Corporate Fed, Dallas edition:  Thomas J. Falk, retired chairman and chief executive officer, Kimberly-Clark Corporation, Dallas, Texas, renamed Chair.

January 1, 2024

The Federal Reserve is on Threads, UNlike even the United Nations....

December 25, 2023

Why not the Fed? U.S. Bank will pay $36 million over allegations the company illegally blocked out-of-work consumers from accessing unemployment benefits during the coronavirus pandemic, top federal banking regulators announced on Tuesday.  At the onset of the COVID-19 pandemic, U.S. Bank had contracts with at least 19 states and the District of Columbia to deliver unemployment benefits to millions of newly out-of-work Americans through its prepaid card.  But due to expanded antifraud controls, the nation's fifth-largest lender froze tens of thousands of prepaid card accounts without leaving users a way to regain access, according to the U.S. Office of the Comptroller of the Currency and U.S. Consumer Financial Protection Bureau.

December 18, 2023

  From Basel III endgame to climate, the Fed has its finger in the wind. But on protests from low income areas of banks' redlining? Not so much.

December 11, 2023

  The Fed didn't even ask Atlantic Union about this issues, which Inner City Press raised in September:

Re: Second Comments Opposing the Applications by Atlantic Union to acquire American National Bankshares  - after Atlantic Union is fined by CFPB for exact issue raised in first comment 

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

This is a second comment opposing Applications of Atlantic Union Bankshares Corporation, Richmond, Virginia to acquire American National Bankshares Inc., and  American National Bank & Trust Company.    Given the CFPB's December 7 fine and statement against Atlantic Union, on a precise issues raised in our first comment (and dismissed in AU's law firm's response, and not asked about by the FED in its AI letter), this comment must be considered timely. 

See, "CFPB Finds Atlantic Union Bank Misled Customers About Fees  The Consumer Financial Protection Bureau (CFPB) has ordered Atlantic Union Bank to pay $6.2 million, saying the bank misled customers and improperly enrolled them into paying overdraft fees.  The $6.2 million in payments includes refunding at least $5 million to consumers and paying a $1.2 million penalty to the CFPB’s victim relief fund, the regulator said in a Thursday (Dec. 7) press release.  The CFPB found that Atlantic Union Bank violated federal law when enrolling thousands of customers in checking account overdraft programs by phone, according to the release. Specifically, the bank charged fees without proper consent and misled customers about the terms and costs of overdraft coverage, the release said.  “Atlantic Union Bank harvested millions of dollars in overdraft fees through a host of illegal practices,” CFPB Director Rohit Chopra said in the release. “Americans are fed up with junk fee scams and the CFPB will continue its work to ensure families are treated fairly.” https://www.pymnts.com/news/cfpb/2023/cfpb-finds-atlantic-union-bank-misled-customers-about-fees/ 

The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved

December 4, 2023

On December 1 Fed Government Michael Barr said, "Foreign banks that have branches in the United States have access to the discount window. Outside the United States, some of these firms also have access to dollar liquidity from their own central banks" -- which as Argentina moves to disband its central bank....

November 27, 2023

Fed Dropped CRA Condition on Linkbankcorp Approval after Posting now Governors Not Told

By Matthew Russell Lee, Patreon Maxwell Book

SOUTH BRONX, Nov 21 – The Federal Reserve Board in considering the proposed merger on the rebound between New York-based Link Bank and Partners Bancorp omitted at the eleventh hour - or apparently the thirteenth hour - language about a Community Reinvestment Act condition imposed by the FDIC.

  Now the Fed and its Governors have been asked Why - and when. But the Fed General Counsel dismissed the request for reconsideration without the Governors even seeing it.

Inner City Press and Fair Finance Watch have long exposed redlining - and in this vein, on May 6 they filed a Community Reinvestment Act challenge with the FDIC and Federal Reserve.

  In October, the FDIC required from LINKBANK a plan to improve its lending to African Americans, which Inner City Press has published on its DocumentCloud here.

A "Corrected" Fed approval emailed to Inner City Press on November 16 did not acknowledge the CRA condition. But the approval order first posted - and voted on?- did. We on November 16 filed a request for reconsideration, on this site.

On  November 21 past 5 pm, a Federal Reserve staff attorney left Inner City Press a voicemail reading a script that the Fed General Counsel - without showing even this to the Board members - determined there was nothing new in the request. But Inner City Press didn't know about the removal of the condition language until after the Fed said it approved it - it could NOT have been shown before. UNreal. And the new(ish) Governors? What do they think or do?

Watch this site.

November 20, 2023

Fed Dropped CRA Condition on Linkbankcorp Approval After Posting or Even Voting On It

By Matthew Russell Lee, Patreon Maxwell Book

SOUTH BRONX, Nov 16 – The Federal Reserve Board in considering the proposed merger on the rebound between New York-based Link Bank and Partners Bancorp omitted at the eleventh hour - or apparently the thirteenth hour - language about a Community Reinvestment Act condition imposed by the FDIC.

  Now the Fed and its Governors have been asked Why - and when.

Inner City Press and Fair Finance Watch have long exposed redlining - and in this vein, on May 6 they filed a Community Reinvestment Act challenge with the FDIC and Federal Reserve.

  In October, the FDIC required from LINKBANK a plan to improve its lending to African Americans, which Inner City Press has published on its DocumentCloud here.

But Link kept spinning, issuing a press release about these partial approvals without mentioning the condition, and concluding it "remains subject to the approval of the Board of Governors of the Federal Reserve System and other customary closing conditions. LINK anticipates closing the Merger in the fourth quarter of 2023." We asked, How do they know?

 Well, they know that the Fed has boiler plate ready, ready to say it is concerned with HMDA disparities without acting on them, ready to say they conferred with the FDIC without acknowledging the condition the FDIC required.

The "Corrected" Fed approval emailed to Inner City Press on November 16 did not acknowledge the CRA condition. But the approval order first posted - and voted on?- did. We have on November 16 filed:

Dear Chair Powell, Secretary Misback and others in the FRS:   This is a formal request for reconsideration under 12 CFR Part 262.3(k) of the Board's "corrected" -- dropping the  reference to FDIC's CRA Condition - Approval of the above-captioned applications by LINKBANCORP, Inc..  

  The Board's website currently says, of this order, that "Note: The initial version of this order was incorrect and inadvertently posted. A corrected version was posted on November 15, 2023."   

 Meanwhile, Deputy Associate Secretary Fennell's letter to me dated November 16 states that "today the Board of Governors of the Federal Reserve System has approved the proposal." If the approval was "today" / November 16, how was it corrected on November 15? The copy emailed to us on November 16 is entitled "Corrected."

   It's worse, much worse. The original (real? approved?) version of the order stated  "The FDIC’s approval of the merger of Bank with the Bank of Delmarva and Virginia Partners Bank includes a condition requiring the resultant institution to develop an action plan, including a marketing plan and additional outreach, to be submitted to the FDIC for approval, for monitoring and improving the extent of home mortgage applications from, and originations to, African American applicants in the resultant institution’s assessment areas. This condition will help ensure that the resultant institution continues to help in meeting the credit needs of the African American population in the resultant institution’s assessment areas."  

  It is true that the FDIC imposed a CRA condition, after receiving comments from Fair Finance Watch / Inner City Press. The FDIC sent the order with condition to us and we posted it online.

   So why - and when - did the Federal Reserve, which claims to have conferred with the FDIC as primary supervisor, abruptly take out of its already-posted approval order the language about the CRA condition? Was it after the Board's approval? Who decided that the CRA condition language should be removed? Why? To make it unenforceable?  

 The "corrected" approval order, with the CRA language removed, is said to be:  "Voting for this action: Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Barr, Governors Bowman, Waller, Cook, and Kugler." When did each vote? Were they made aware of, and is each Governor responsible for, the removal of the CRA condition language?  

  These are clearly facts that we could not present during the official comment period, or even prior to approval (or at least, "correction").    And they militate for reconsideration, for airing to each Governor and an explanation, given the Governors' claims and statements about their commitment to CRA.

November 13, 2023

Amid a climate change protest at the IMF on November 9, who said "Shut the f---ing door"?

November 6, 2023

The Fed last week ended an enforcement order against Citigroup, starting "xWHEREAS, Citigroup Inc., New York, New York (“Citigroup”), a registered bank holding company, owns and controls Citibank, N.A., Sioux Falls, South Dakota (the “Bank”), other U.S. insured depository institutions, various Edge Act corporations organized under section 25A of the Federal Reserve Act (12 U.S.C. § 611 et seq.), and multiple other nonbank subsidiaries" -

October 30, 2023

As CRA Rule Launched by Fed Ameris Pre DOJ Deal Was Protested But Merger Rubber Stamped

By Matthew R. Lee, Patreon

NEW YORK, Oct 24 – Will the Federal Reserve (and OCC and FDIC) actually strengthen Community Reinvestment Act enforcement, as they today belatedly release the rule? Well, the bank with the worst record in the United States for gouging consumers with overdraft fees, Ameris, nevertheless got a rubber stamp approval from the Fed, to buy Hamilton State Bancshares in Georgia. Now this month  it has settled discrimination charges with DOJ. Tellingly, the Fed could or would not see the discrimination.

In October 2023, "The resolution with Ameris Bank was filed in the U.S. District Court for the Middle District of Florida, along with the Department’s complaint, and is subject to court approval. The Department’s complaint alleges that, from 2016 through 2021, Ameris Bank avoided providing mortgage services to majority-Black and Hispanic neighborhoods in Jacksonville and discouraged people seeking credit in those communities from obtaining home loans." Here's what we said:

From Fair Finance Watch's (and Inner City Press') filings with the Fed: "Fair Finance Watch has reviewed Ameris' lending in 2016, the most recent year for which Home Mortgage Disclosure Act (HMDA) data [wa]s available, in both the Atlanta and the Jacksonville Metropolitan Statistical Areas (MSAs) and finds both to be disparate..  In the Jacksonville MSA in 2016 for home purchase loans, Ameris denied the applications of African Americans 2.69 times more frequently than those of whites. Ameris made 203 such loans to whites and only SEVEN to African Americans. In the Jacksonville MSA in 2016 for home improvements loans, Ameris made five such loans to whites and none to African Americans or Latinos. In the Jacksonville MSA in 2016 for refinance loans, Ameris denied the applications of African Americans 2.2 times more frequently than those of whites. Ameris made 100 such loans to whites and only FOUR to African Americans. This is disparate.

Now DOJ belatedly agrees. And the Fed, even as it releases a new CRA regulation? Watch this site.

October 23, 2023

In October, FDIC has required from LINKBANK a plan to improve its lending to African Americans, which Inner City Press has published on its DocumentCloud here.
 But Link keeps spinning, issuing a press release about these partial approvals without mentioning the condition, and concluding it "remains subject to the approval of the Board of Governors of the Federal Reserve System and other customary closing conditions. LINK anticipates closing the Merger in the fourth quarter of 2023." How do they know?

October 16, 2023

So Governor Bowman went in person to Morocco and gave a speech, in front of a painting of the King. Bowman's views on Western Sahara aren't known...

October 9, 2023

 It was said that the Fed would belatedly release the CRA reg on October 6. But this is all they released: "October 06, 2023  Federal Reserve Board finalizes a rule establishing capital requirements for insurers supervised by the Board "

October 2, 2023

  It's said the CRA reg will belated by released on October 6- watch this site.

September 25, 2023

Fed wants to hear more from bankers: Governor Michelle W. Bowman to the Independent Community Bankers of Colorado: "I strongly encourage your participation to inform the rulemaking process. This audience is uniquely positioned to provide real-world feedback about the intended and unintended consequences of agency rulemakings."

September 18, 2023

In SDNY, Fed trial moved: "    Gardner-Alfred et al v. Federal Reserve Bank of New York Case Number:    1:22-cv-01585-LJL Filer:     Document Number:    187(No document attached) Docket Text: ORDER granting [186] Letter Motion to Continue Trial Date addressed to Judge Lewis J. Liman from Alex Leonard dated September 14, 2023 filed by Federal Reserve Bank of New York. The Court adjourns the previously set trial and pretrial deadlines and adopts the following trial schedule. The joint pretrial order, requests to charge, proposed voir dire, and in limine motions are due by October 6, 2023. Oppositions to motions in limine and objections to requests to charge and voir dire are due by October 13, 2023. The Final Pretrial Conference is rescheduled to December 6, 2023 at 3:30PM in Courtroom 15C at the 500 Pearl Street Courthouse. The Jury Trial is rescheduled to December 11, 2023 at 9:00AM in Courtroom 15C at the 500 Pearl Street Courthouse"

September 11, 2023

Here's a strange headline from the Fed's website: "

September 05, 2023

Federal Reserve Board announces approval of application by R. Dean Phillips Bank Trust Dated 11-19-2004, and its subsidiary, HNB Bancorp, Inc.

  2004??

September 4, 2023

What has the Fed done about JPM Chase's enabling of Jeffrey Epstein? Nothing. Even the NYSDFS acted on Deutsche Banks... In Epstein Case JPM Chase Says Congress Did Not Envision USVI Suit as Oct 23 Trial Looms In Epstein Case JPM Chase Says Congress Did Not Envision USVI Suit as Oct 23 Trial Looms

By Matthew Russell Lee, Patreon Maxwell book

SDNY COURTHOUSE, Aug 31 – J.P. Morgan Chase and Deutsche Bank were sued for their enabling of Jeffrey Epstein, in lawsuits filed on Thanksgiving 2022 in the U.S. District Court for the Southern District of New York, where Inner City Press found them in the docket. Then the US Virgin Islands joined in against Chase

On August 31, Judge Rakoff heard oral argument from USVI and JPMorgan Chase, Inner City Press was there, thread:

USVI's lawyer: We seek to enjoin JPMorgan --

Judge Rakoff: From banking Jeffrey Epstein? He's...

USVI: From violating the law. Absent Jeffrey Epstein's death, Chase would still be violating the TVPA.

 Judge Rakoff: Maybe this would not be a jury trial... Only in my nightmares do I see this as a bench trial.

 JPM Chase lawyer: This was not the intent of Congress. All have are some snippets of floor statements

Judge Rakoff: If the trial goes forward, it'll start Oct 23. I'll rule on these motions by the end of September, if not before. Adjourned

More on Substack here

August 28, 2023

It's on: "Banc of California, Inc., Santa Ana, California;    to acquire PacWest Bancorp, and thereby indirectly acquire Pacific Western Bank, both of Beverly Hills, California.    3    San Francisco    09/29/2023" - so how will the Fed treat this application? On greased skids? And mightn't JPM Chase need to apply? It's another litmus test...

August 21, 2023

Farmington Bank Belatedly Shut By Fed as SBF Jailed FOIA Appeal for Crypto Creeps Sequel

by Matthew Russell Lee, Patreon Book Substack

SDNY COURTHOUSE, Aug 17 – Alongside the larger flame-out of Silicon Valley Bank, Signature Bank too failed.

  The Federal Reserve in belated response to Inner City Press' FOIA request says it has no record of reviewing Signature and crypto, nor any "record reflecting any  review by the FRS of Silvergate’s (and Provident Bancorp Inc.,  Metropolitan Commercial Bank, Signature Bank, Customers  Bancorp Inc.) of the banks’ connections with crypto-currency firms."

  Federal Reserve letter to Inner City Press here

 The Fed did, however, belatedly give Inner City Press the Farmington State Bank application it approved, with 100% ownership by Bahamas based Jean Chalopin. It's now on Inner City Press' DocumentCloud here.

  Now on August 17, after FTX's Sam Bankman-Fried has been remanded to prison pending trial (Inner City Press "Crypto Creeps" book here), the Federal Reserve has belatedly taken action on Farmington, the horse decidedly out of (and in the case of SBF back in) the barn: "The Federal Reserve Board on Thursday announced an enforcement action against Farmington State Bank, of Farmington, Washington, and its holding company, FBH Corporation. In 2022, Farmington improperly changed its business plan without notifying the bank's supervisors and obtaining prior approval for those changes. Farmington has previously announced that it will voluntarily sell its loans and deposits to the Bank of Eastern Oregon."

On April 8, Inner City Press filed a FOIA appeal with the Fed: "This is an appeal of the FRB's denial and delayed and untransparent processing of and determinations on Inner City Press' December 22, 2022 FOIA request... After more than three months, all the FRB provided was the public portion of Farmington State Bank's application - this while FRB Governor Barr just told Congress that the Fed wants to be transparent, including to outside reviews.     Most cynically, the Denial claims that "confidential information is not responsive" - basing that on its interpretation of a first request for clarification, a misinterpretation that all Inner City Press was request was previously public information - information which even then the Fed did not provide for eleven weeks.  We wanted and want the records reflecting the FRS' review of Farmington State Bank's application, and the records about the Fed's review of crypto and the names firms: Silvergate with its FTX connections, record reflecting any review by the FRS of Silvergate's (and Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank, Customers Bancorp Inc).

   Does the Fed as Governor Barr said want to be transparent or not?

We'll have more on this.

August 14, 2023

"The Federal Reserve Board on Tuesday provided additional information on its program to supervise novel activities in the banks it oversees. Novel activities include complex, technology-driven partnerships with non-banks to provide banking services to customers; and activities that involve crypto-assets and distributed ledger or "blockchain" technology" - let's see what comes out of the SBF trial, now that he's detained....

August 7, 2023

Link Bank Bid To Buy Partners Bancorp On the Ocean Rebound has Belated Fed CRA Questions

By Matthew Russell Lee, Patreon Maxwell Book

SOUTH BRONX, Aug 1 –  Pennsylvania, Delaware and Virginia are portrayed as diverse and ever progressive places. But their banks, not so much. 

 Consider for example the proposed merger on the rebound between New York-based Link Bank and Partners Bancorp, which recently broke off its proposed deal with OceanFirst.

Inner City Press and Fair Finance Watch have long exposed redlining - and in this vein, on May 6 they filed a Community Reinvestment Act challenge with the Federal Reserve.

On August 1, the Fed belated asked: "ased on staff’s review of Applicant’s letter to Mr. William T. Wisser, dated July  24, 2023, the following additional information is requested. Supporting documentation should be  provided, as appropriate.

1. Describe in detail how LinkBank will adjust its fair lending program to accommodate the  expanded market area acquired from VPB, particularly the Washington-Arlington-Alexandria  VA-MD MMSA. 2. Clarify whether, and to what extent, LinkBank intends to integrate the consumer  compliance and fair lending programs of TBOD and VPB into the resultant institution’s  consumer compliance and fair lending programs.

3. Provide a list of organizations and community groups, if any, with which LinkBank has  engaged since 2021 to help reach African American borrowers in Pennsylvania. In your  response, provide detailed information about any partnerships that LinkBank has engaged in  with these organizations and community groups since 2021. 4. Provide a list of organizations and community groups, if any, with which VPB has  engaged since 2021 to help reach African American borrowers in the Washington-ArlingtonAlexandria VA-MD MMSA. In your response, provide detailed information about any  partnerships that VPB has engaged in with these organizations and community groups since  2021.

5. Discuss in detail LinkBank’s and VPB’s efforts to reach African American borrowers in  any area, including any specialized products and marketing campaigns targeting such  borrowers, since 2021.6. Provide further information on LinkBank’s recent CRA activities since 2021, following  the latest CRA performance evaluation of The Gratz Bank on March 22, 2021 (which  preceded the acquisition of LinkBank by The Gratz Bank and the resulting institution’s name  change to “LinkBank”). In particular, provide further information regarding LinkBank’s  activities to improve its geographical distribution of loans throughout its assessment areas  since the March 22, 2021, performance evaluation of The Gratz Bank. 7. Provide further information on VPB’s CRA activities since its October 2, 2017,  performance evaluation."

  Fair Finance Watch has been reviewing LinkBank including its 2021 HMDA data not taken into account in any CRA exam and finds it troubling.

July 31, 2023

From the Fed last week: "The Federal Reserve Board on Monday announced a consent order and a $268.5 million fine with UBS Group AG, of Zurich, Switzerland, for misconduct by Credit Suisse, which UBS subsequently acquired in June 2023. The misconduct involved Credit Suisse's unsafe and unsound counterparty credit risk management practices with its former counterparty, Archegos Capital Management LP" - but what now about the Hwang subpoenas reported in this week's Inner City Press Bank Beat report?

July 24, 2023

Bowman watch, safe harbor bid edition: Fed Governor Michelle Bowman says the Board  "should improve its approach to processing applications in cases where a member of the public has made an adverse comment, particularly when the recent supervisory record addresses the concerns raised and is consistent with approval."  Vantage Bank Texas President and CEO Jeff Sinnott agrees with Bowman - not surprising. But what about Quontic, which the Reserve Bank approved, before the enforcement action?

July 17, 2023

Kids gloves, from Link Bank to BofA to... "The Federal Reserve Board on Tuesday announced the termination of the enforcement action listed below: Capital One Financial Corporation, McLean, Virginia Cease and Desist Order dated August 4, 2020"

July 10, 2023

Earlier this year Inner City Press / Fair Finance Watch wrote to the Federal Reserve with complaints about Quontic Banks. In a new low, after the Board in DC denied any extension of the comment period, it was the Federal Reserve Bank of Philadelphia which wrote back and rubber-stamp approved on a delegated basis - no HMDA data, no Board. Now this: "Quontic Bank Acquisition Corp., Astoria, New York, and Quontic Bank Holdings Corp., Astoria, New York Written Agreement dated July 5, 2023." A corrective action notice...

July 3, 2023

Stress test shorts: The decline in Truist's and U.S. Bancorp's stressed CET1 ratio looks rather poorly compared to the median (-230 and -180 basis points, respectively, Figure 3), and USB saw its ratio drop to the second lowest in the group, surpassed only by Citizens Financial Group (CFG) with a stressed CET1 ratio of 6.4%.

June 26, 2023

Since Kugler has pledged to recuse herself from participating in any matter involving a former employer or client for four years — beyond what’s required under the Biden administration’s ethics pledge — and to refrain from signing on to a financial services firm within four years of leaving government - why can't and don't the other Fed governors?

June 19, 2023

Look who has requested access to Reserve Bank master accounts and financial services

COMMERCIUM FINANCIAL    CHEYENNE    WY    5/23/2022    Pending        Tier 3    Kansas City    Not Federally Insured CUSTODIA BANK, INC    CHEYENNE    WY    10/29/2020    Rejected    1/27/2023    Tier 3    Kansas City    Not Federally Insured KRAKEN FINANCIAL    CHEYENNE    WY    10/6/2020    Pending        Tier 3    Kansas City    Not Federally Insured MORNING STAR FCU    LAME DEER    MT    1/26/2023    Approved    4/28/2023    Tier 1    Minneapolis    NCUA NORTH STAR COMMUNITY CU    MADDOCK    ND    1/6/2023    Approved    5/10/2023    Tier 1    Minneapolis    NCUA GS&L MUNICIPAL BANK    GOUVERNEUR    NY    10/27/2022    Approved    2/28/2023    Tier 1    New York    FDIC FNALITY    LONDON        10/17/2022    Pending        TBD    New York    Not Federally Insured

June 12, 2023

Gov Jefferson: "the staffs of the U.S. federal banking agencies are diligently working on a Basel III endgame proposal that should be issued for public comment soon. At the same time, the Federal Reserve staff is considering ways to enhance the ability of stress tests to capture a wider range of risks and identify vulnerabilities at the largest banking organizations."

June 5, 2023

Bowman Watch II: "This local perspective is one of the great advantages of the Federal Reserve System's regional structure, and of the Fed Listens initiative, which complements the Board's efforts to understand national economic conditions.  In 2019, the Board launched Fed Listens with a year of listening sessions with the public focused on monetary policy"

May 29, 2029

Waller watch: "There is a little over a month between the June and July FOMC meetings, and during that time we will learn more about how credit conditions are evolving. Over four months will have passed between the Silicon Valley Bank failure and the July meeting. By then we will have a much clearer idea about credit conditions. If banking conditions do not appear to have tightened excessively, then hiking in July could well be the appropriate policy."

May 22, 2023

Bowman watch: "I see one of my many functions and roles as a Member of the Board of Governors as providing that open door and opportunity for direct engagement with a policymaker for our regional and smaller banks, as well. Your Texas ABA executive, Chris Furlow, who is a long time friend and colleague, can put you directly in touch with me should you desire to do so. "

May 15, 2023

  Governor Michelle W. Bowman gave a speech about bank failures - and nary a word about the exclusion of the public from any review of those being handed the failed banks, like JPM Chase...

May 8, 2023

PacWest on the Ropes with Comerica to Follow Fed Collins on the Board as FRB Says All Good

by Matthew Russell Lee, Patreon Book Substack

FEDERAL COURTHOUSE, May 4 – After the failures of Silicon Valley Bank and Signature Bank in New York, next was First Republic Bank.

  On on May 3, PacWest Bank's shares tumbled, also those of Western Alliance, Zions and Comerica -- which has former Federal Reserve big wig Michael E. Collins cashing in on its board.

Meanwhile the Federal Reserve Board in Washington assures that all's well - as it denies FOIA requests about its regulation, notably lax on fair lending and the Community Reinvestment Act.

  At 3 am Eastern time on May 1, the First Republic (and $13 billion) was given to JPMorgan Chase, which is already over the "maximum" 10% of US deposits threshold - and whose CEO Jamie Dimon has been ordered deposed about his knowledge of, and link to, the pedophile conspiracy of Jeffrey Epstein. It's come to this.

   The JPM Chase complaint is on Patreon, here.

On March 20, 2023 U.S. District Court for the Southern District of New York Judge Jed S. Rakoff in a bottom line order dismissed some but not all claims, in the Epstein-related cases against JPMC and Deutsche Bank.

Inner City Press,, which reports daily on the SDNY (and the Community Reinvestment Act evasions of Chase and other banks like KeyCorp) put the order on its DocumentCloud here.

  April 30, 2023 piece on JPM Chasing First Republic amid WHCA glitz and the E. Jean Carroll v. Trump trial, on Substack here

  There was no public input into the sell-off, including into how many of First Republic's 84 branches for example in New York City will be closed.
  Back on April 18, after a telephone conference without transcription, Judge Rakoff ordered: "Jamie Dimon should be set aside two days for his deposition. On the first day, plaintiffs will have the opportunity to depose Mr. Dimon for a combined total of five hours. Mr. Staley will have the opportunity to depose Mr. Dimon for two hours. If, at the end of the first day, any party believes that it needs more time to depose Mr. Dimon, it must convene a joint call to Chambers by no later than 5:00 PM to explain why. The Court will then rule as to whether Mr. Dimons deposition should continue for a second day and, if so, for how long."

Will that call be open to the press and public?

More on Substack here.

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May 1, 2023

FRB Downplays Its Failure on SVB As Claims No Review of Signature Crypto But FOIA Scam

by Matthew Russell Lee, Patreon Book Substack

SDNY COURTHOUSE, April 28 – Alongside the larger flame-out of Silicon Valley Bank, Signature Bank too failed, FOIA story below.

On SVB, the Federal Reserve on April 28 issues a report downplaying it failure(s) and notably not mentioning the lack of any public comment or Community Reinvestment Act / CBA review as SVB was handed over to First Citizens, and Signature to NYCB.

  The Federal Reserve in belated response to Inner City Press' FOIA request says it has no record of reviewing Signature and crypto, nor any "record reflecting any  review by the FRS of Silvergate’s (and Provident Bancorp Inc.,  Metropolitan Commercial Bank, Signature Bank, Customers  Bancorp Inc.) of the banks’ connections with crypto-currency firms."

  Federal Reserve letter to Inner City Press here

 The Fed did, however, belatedly give Inner City Press the Farmington State Bank application it approved, with 100% ownership by Bahamas based Jean Chalopin. It's now on Inner City Press' DocumentCloud here. We'll have more on this.

Inner City Press submitted to the Federal Reserve a Freedom of Information Act request including  about Signature Bank: "This is a FOIA request for all record regarding FTX... Also, for Silvergate with its FTX connections, record reflecting any review by the FRS of Silvergate's (and Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank, Customers Bancorp Inc.) of the banks' connections with crypto-currency firms... This is a request for expedited treatment."

The Federal Reserve acknowledged receipt and said it was granting expedited process. Then -- nothing.

Now, as the Fed belatedly backs up Signature Bank after Silicon Valley Bank, the Fed tries to paper its delay: "Months after the Federal Reserve said it granted Inner City Press expedited processing of its FOIA request on the Fed's work / errors on crypto, and two months after Inner City Press answered a request for clarification, past 4 pm on Friday March 10, 2023, this: "Good afternoon Mr. Lee The second part of your request seems to concern other entities (Silvergate, Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank, Customers Bancorp Inc.).  Please confirm the scope of this part of your request, did you intend to seek applications related information for these entities?"

 Inner City Press again immediately responded and clarified, about FTX. Now the response above. Watch this site."

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April 24, 2023

Today's Federal Reserve doesn't believe that the collapse of banks and crypto are matters of urgent public concern - they've written to Inner City Press: "In support of your request for expedited treatment, you state that “‘in light of  the indictment of FTX / Alameda’s Sam Bankman-Fried and Caroline Ellison (cooperating), and an upcoming January 3, 2023 hearing’ - case proceeds.” However, you have not set forth facts demonstrating an urgent need to inform the public about an actual or alleged activity of the Federal Government. Thus, I have determined that your request does not comply with the criteria for expedited processing." Really.

April 17, 2023

On April 14, the Fed announced "The Federal Reserve Board on Friday announced its approval for UBS Group AG, of Zürich, Switzerland, to acquire the U.S. subsidiaries of Credit Suisse Group AG, of Zürich, Switzerland.  The application was submitted in connection with UBS Group AG's acquisition of Credit Suisse Group AG. In connection with the proposal, UBS has committed to provide the Board with an implementation plan for combining the U.S. business and operations of UBS and Credit Suisse, which will be updated quarterly. The implementation plan will address UBS's obligations to comply with more stringent enhanced prudential standards, including liquidity standards." No such announcement with regard to SVB - First Citizens, or Signature - NYCB. So oversea forced mergers are "reviewed," but those in the US are not?

April 10, 2023

Fed-Speaks: "The Federal Reserve Board on Thursday announced that it has fined Wells Fargo & Co., of San Francisco, California, $67.8 million for the firm's unsafe or unsound practices relating to historical inadequate oversight of sanctions compliance risks at its subsidiary bank, Wells Fargo Bank, N.A." Historical?

April 3, 2023

FRB Claims No Review of Signature Crypto But Here Is Farmington Application FRBSF OKed

by Matthew Russell Lee, Patreon Book Substack

SDNY COURTHOUSE, April 1 – Alongside the larger flame-out of Silicon Valley Bank, Signature Bank too failed.

  Now the Federal Reserve in belated response to Inner City Press' FOIA request says it has no record of reviewing Signature and crypto, nor any "record reflecting any  review by the FRS of Silvergate’s (and Provident Bancorp Inc.,  Metropolitan Commercial Bank, Signature Bank, Customers  Bancorp Inc.) of the banks’ connections with crypto-currency firms."

  Federal Reserve letter to Inner City Press here

 The Fed did, however, belatedly give Inner City Press the Farmington State Bank application it approved, with 100% ownership by Bahamas based Jean Chalopin. It's now on Inner City Press' DocumentCloud here. We'll have more on this.

March 27, 2023

Credit Suisse USB Merger amid Bank Meltdown Preapproved by Fed as Collins on Comerica

by Matthew Russell Lee, Patreon Book Substack

SDNY COURTHOUSE, March 19 – Alongside the larger flame-out of Silicon Valley Bank, Signature Bank too failed. Now on March 19 in Switzerland, the forced and subsidized marriage of USB and Credit Suisse. Both have US subsidiaries but from the Fed, this pre-approval:

 "The following statement was released by Secretary of the Treasury Janet L. Yellen and Federal Reserve Board Chair Jerome H. Powell:  'We welcome the announcements by the Swiss authorities today to support financial stability. The capital and liquidity positions of the U.S. banking system are strong, and the U.S. financial system is resilient. We have been in close contact with our international counterparts to support their implementation.'"

  Preapproval, like the entry of Goldman Sachs and Morgan Stanley into the banking system, with no comment period.

On Signature Bank's board of directors is not only Barney Frank (who after leaving Congress undermine his own Dodd Frank Act) but also former New York State Superintendent of Banks Derrick D. Cephas.

  Among those being reviewed by Moody, as simply the first example, former Federal Reserve Bank of Philadelphia and Cleveland bigwig Michael E. Collins is on the board of Comerica, the bank that abandoned Detroit for Dallas. The Administration is saying that people will be held accountable - but who?

Next up: PacWest and Western Alliance, Intrust, UMB and Zions. Watch this site.

March 20, 2023

Amid Bank Meltdown Former Fed Collins on Comerica Board Like Signature Frank & Cephas

by Matthew Russell Lee, Patreon Book Substack

SDNY COURTHOUSE, March 14 – Alongside the larger flame-out of Silicon Valley Bank, over the weekend Signature Bank too failed. On Signature Bank's board of directors is not only Barney Frank (who after leaving Congress undermine his own Dodd Frank Act) but also former New York State Superintendent of Banks Derrick D. Cephas.

  Among those being reviewed by Moody, as simply the first example, former Federal Reserve Bank of Philadelphia and Cleveland bigwig Michael E. Collins is on the board of Comerica, the bank that abandoned Detroit for Dallas. The Administration is saying that people will be held accountable - but who?

March 13, 2023

  Months after the Federal Reserve said it granted Inner City Press expedited processing of its FOIA request on the Fed's work / errors on crypto, and two months after Inner City Press answered a request for clarification, past 4 pm on Friday March 10, 2023, this: "Good afternoon Mr. Lee  Staff is still unclear about the scope of your request.  Referring to the initial clarification email below, the second part of your request still needs clarification.      “The second part of your request seems to concern other entities (Silvergate, Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank, Customers Bancorp Inc.).  Please confirm the scope of this part of your request, did you intend to seek applications related information for these entities?  Clarifications are needed in order to conduct a search of Board records and process this portion of your request.”     I realize from your January 10 email response that you are seeking application submissions, Additional Information “AI”, and approval information.  However, it is unclear what application(s) you seek this information concerning.  Did you intend to seek applications for FTX to acquire or merge with Silvergate, FTX to acquire or merge with Provident Bancorp, Inc., or FTX to acquire or merge with Metropolitan Commercial Bank?  It is unclear the connection you intended for these institutions (other than media mentions) and as such conducting a search of Board records cannot be completed.  Did you intend to seek records that reference all of these institutions together?  Did you intend to seek applications records about each institution?  If this was your intent, we need a target institution ABC Bank and Provident, Signature Bank and XYZ Bank, for example.  From these examples alone, the interpretations are many.  It would be helpful if you could include the date the application was approved or announced in the H.2.  Doing so would allow us to search and review records more quickly, should they exist.      I realize that you responded in a timely manner to our last communication about this request, but your comments were not specific clarifications with respect to the named institutions in part 2 of your request that would enable staff to conduct a reasonable search.  If you have additional context, please provide it as soon as possible.  After which, staff may be able to make reasonable interpretations regarding the information you seek."

  Inner City Press again immediately responded and clarified, about FTX.  Watch this site.

March 6, 2023

BMO Harris BNP Got Fed OK Despite Peters Case With Climate Dismissed Now French Suit

By Matthew Russell Lee, Patreon Story

FED COURT / S Bronx, Feb 27 – Whether or not the U.S. Community Reinvestment Act will actually be enforced under the Administration and its regulators remains an open question, or one answered in the negative, at least by the Federal Reserve. Consider: Inner City Press immediately reported that BMO Harris' application to buy Bank of the West and its more than 500 branches from BNP would be a litmus test.

 Fair Finance Watch noted, from Day 1, that in 2020 BMO Harris denied many more mortgage applications from African Americans than it approved: 509 denied versus only 223 loans made to African Americans, nationwide. BMO's numbers for whites were the reverse: 9270 loans made, versus less then six thousand denials. As noted, there are also climate and secrecy issues. Fair Finance Watch and other raised branch closings.

On October 14, the banks' counsel sent Fair Finance Watch what purported to be a copy of its submission to the Fed under the Ex Parte Rules -- but the entire thing was withheld, under this cover message: "Attached is the public portion of the BMO response to the Federal Reserve Bank of Chicago’s request for additional information received on October 3, 2022.      Please feel free to reach out to me with any questions.     Best,  Ro     Ro Spaziani Wachtell, Lipton, Rosen & Katz."  No substance was attached, just a request for confidential treatment This was outrageous. The Fed itself should make these types of exhibits public.

February 27, 2023

The Federal Reserve's FOIA responses have hit a new low; this appeal has been filed:

This is a FOIA appeal of the FRB's total denial of Inner City Press' FOIA request regarding MVB Bank's February 7 additional information response, in which MVB answered each and every question with referring to a withheld, "Confidential" Exhibit. The letter was and is subject to the Fed's ex parte rules - withholding the entire response, including after an immediate FOIA request, makes the Fed's ex parte rules meaningless. One of the withheld answers is about pro forma organizational chart, another concerns crypto, a matter of public import on which the Fed's record, after the SF Reserve Bank's Farmington State Bank / FTX - Alameda approval, is ever more questionable.

  In signing in to the Fed's FOIA site to obtain this FOIA denial, I noticed that the Fed lists Inner City Press' earlier FOIA request about Farmington and other Fed crypto approvals (2023-178) as "On Hold - Need Info/Clarification." But on January 10, 2023 I immediately answered the request for clarification / narrowing. What is happening with the Fed's FOIA compliance? What is happening with the crypto FOIA request, on which the Fed purported to grant expedited treatment? These should be dealt with, on or in parallel with this appeal.

Thank you for your prompt attention,

Matthew R. Lee
Inner City Press / Fair Finance Watch

February 20, 2023

  With Lael Brainard leaving, even before the CRA reg is out, who's next? With Governor Bowman beating the drum for even faster and more automatic merger approvals, the next Governors better be one that stands up to that...

February 13, 2023

Lakeland Bank DOJ Deal Left Disparities in NY So Protest Now Fed Questions to Provident Here

By Matthew Russell Lee, Patreon Maxwell book

SOUTH BRONX NY, Feb 10 – When the US Department of Justice sued and immediately settled with Lakeland Bank for fair lending violations, it announced a proposed merger with Provident Bank.

As if to sweep it under the carpet.

And when Fair Finance Watch looked into it, it found that the DOJ settlement did not address in any way the banks' disparities in New York. So on December 1, the FDIC's comment deadline, it filed the below, with Inner City Press on the FOIA.


We refer to the application filed by Provident Financial Services, Inc. (“Provident”), Jersey City, New Jersey, for prior approval of the Board of Governors of the Federal Reserve System (the “Board”), pursuant to Section 3(a)(3) and 3(a)(5) of the Bank Holding Company Act of 1956, as amended, and Section 225.15 of Regulation Y, to acquire Lakeland Bancorp, Inc. (“Lakeland”), Oak Ridge, New Jersey, and thereby indirectly acquire Lakeland Bank, Newfoundland, New Jersey (“Transaction”). Based on our review of the current record, the following additional information is requested. Please provide responses to all the following items, including those in the Confidential Annex. Supporting documentation should be provided, as appropriate. Convenience & Needs/Community Reinvestment Act (“Act”) 1. Provident’s response to Question 1 of the November 30 Request for Additional Information (“November 30 AI Request”) indicates that “[t]he combined company will deliver an expanded set of products and services to its customers and communities.” Describe those products and services to be offered by the combined organization that Provident deems most beneficial to customers in low- or moderate-income (“LMI”) geographies or income levels. 2. Indicate whether any consumer products or community development programs and services of either bank are expected to be discontinued as a result of the proposed transaction, and whether any products, programs or services that are not currently offered will be made available in the combined organization’s markets. 3. The application states “Provident and Lakeland will determine through the integration planning process how the Combined Bank will continue the successful processes, policies, procedures and technology platforms of Provident and Lakeland to maintain a strong, comprehensive and sustainable CRA program.” Provide an update on these efforts. Mark J. Menting, Esq. February 8, 2023 2 NONCONFIDENTIAL // EXTERNAL Compliance Program 4. In the response to Question 6(a) of the November 30 AI Request, Provident stated that it anticipated that its existing compliance risk management program would “either be the successor policies and procedures for the combined organization, or that they may serve as a solid foundation for revised policies and procedures going forward.” If available, provide an update on the expected compliance risk management program at the combined organization. 5. Describe in greater detail Provident Bank’s current fair lending program and risk management controls with respect to fair lending and discuss the rationale behind the decision for the combined organization to adopt the overall framework and structure of Lakeland Bank’s fair lending compliance program. To the extent not previously addressed, include in your discussion any areas of Lakeland Bank’s existing fair lending program the combined organization intends to enhance, as well as all efforts to ensure that the policies and procedures adopted by the combined organization will be adequate for the combined organization to provide equal access to credit to majority-minority communities in its assessment area (“AA”). Branching 6. For Provident Bank, Lakeland Bank, and the combined organization, provide the number and percentage of total branches that are or will be located in LMI and/or majorityminority census tracts. 7. To the extent not previously addressed, describe the process by which Provident Bank currently determines whether and where to open or close a branch. Include in your discussion any fair lending considerations the bank takes into account in making such determinations. Indicate whether the existing policies and procedures of Provident Bank or Lakeland Bank will be implemented at the combined organization. Staffing 8. Discuss whether any existing staff of Provident Bank or Lakeland Bank are under consideration to be the combined organization’s Chief Compliance Officer or Fair Banking Officer. If so, identify those individuals and provide an update regarding the timing and content of the selection process, if available. 9. Confirm, if such is the case, that Lakeland Bank’s current Community Development Officer will continue in that role at the combined organization. If not, indicate who will assume that position at the combined organization, if known. Mark J. Menting, Esq. February 8, 2023 3 NONCONFIDENTIAL // EXTERNAL 10. Provide an update to the organizational chart provided in response to question 6(b) of the November 30 AI Request reflecting all compliance-related positions at the combined organization. For those positions where an individual has been identified to fill the role, indicate that individual’s name in the organizational chart. Department of Justice (“DOJ”) Consent Order 11. Under Section C of the Consent Order, Lakeland Bank is required to take certain steps with respect to fair lending training. Indicate whether the combined organization intends to continue to adhere to those training requirements following the proposed acquisition. If so, indicate whether they will apply to all employees of the combined organization or only those employees retained from Lakeland Bank. 12. Provide an update on the timing of the opening of the full-service branch in Newark, New Jersey, as described in Paragraph 19 of the Consent Order. In addition, provide an update on the plans of Lakeland Bank or the combined organization to open a second branch, if available.

Tellingly, the banks' response on CRA to not only the lending disparities but even the rare DOJ discrimination settlements has been to attack the comments.

February 6, 2023

  While the Fed pretends to be serious, now on Custodia, after allowing FTX in through Farmington State Bank, now they delegate to a (privately-owned) Reserve Bank the approval for a bank with a crypto card and other problems: "We refer to the Notice of Change in Bank Control (the “Notice”) submitted to the Federal Reserve Bank of Philadelphia (“Reserve Bank”) and the Board of Governors of the Federal Reserve System (“Board”), pursuant to the Change in Bank Control Act of 1978, as amended, by (1) the Estate of Steven B. Schnall, Sherri Silver Schnall as Preliminary Executor, both of New York, New York, to retain voting shares of Quontic Bank Acquisition Corp. (“QBAC”), and Quontic Bank Holdings Corp. (“QBHC”), and thereby indirectly retain voting shares of Quontic Bank, all of New York, New York; and (2) the Schnall Disclaimer Trust A, Sherri Silver Schnall, individually, and as co-trustee, both of New York, New York, with Amie Hoffman, as co-trustee, New Hope, Pennsylvania; and the Sherri S. Schnall Family Irrevocable Trust, Amie Hoffman as trustee, both of New Hope, Pennsylvania; to acquire voting shares of QBAC, and QBHC, and thereby indirectly acquire voting shares of Quontic Bank. Accordingly, all notificants in the Notice to become a group acting in concert. This Reserve Bank, acting under authority delegated by the Board at section 265.11(c)(5)(iv) of its Rules Regarding Delegation of Authority, has determined not to disapprove the Notice." We'll have more on this.

January 30, 2023


Fed Denies Custodia Bank After FTX Wreck As FOIAed on Moonstone Bank by Inner City Press

By Matthew Russell Lee, Patreon

SDNY COURTHOUSE, Jan 27  – Amid the prosecution of Samuel Bankman-Fried on wire fraud, money laundering and campaign finance violation charges, the role of the Federal Reserve is coming to the fore.  Now it seeks to step back from its brink by denying the application of Custodia, with order still withheld. See below.

 Inner City Press was unsurprised to learn of Fed laxity as Alameda invested in Farmington State Bank, renamed Moonstone Bank.

Inner City Press submitted to the Federal Reserve a Freedom of Information Act request including: "This is a FOIA request for all record regarding the FRS' approval for the application / request for membership in the Federal Reserve System by Farmington State Bank (giving rise to FRBSF president Daly's approval on a delegated basis in 2021), and the subsequent renaming of the bank to Mooonstone and taking of a stake by FTX/Alameda.  Also, for Silvergate with its FTX connections, record reflecting any review by the FRS of Silvergate's (and Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank, Customers Bancorp Inc.) of the banks' connections with crypto-currency firms... This is a request for expedited treatment, in light of the indictment of FTX / Alameda's Sam Bankman-Fried and Caroline Ellison (cooperating), and an upcoming January 3, 2023 hearing."

The Federal Reserve  acknowledged receipt: "Your request has been assigned number FOIA-2023-00178. Please reference this number in all future correspondence.    Request description:  This is a FOIA request for all record regarding the FRS' approval for the application / request for membership in the Federal Reserve System by Farmington State Bank [also] any review by the FRS of Silvergate's (and Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank, Customers Bancorp Inc.) of the banks' connections with crypto-currency firms."

On January 27, still withholding documents, the Fed "announced its denial of the application by Custodia Bank, Inc., Cheyenne, Wyoming, to become a member of the Federal Reserve System. The Board has concluded that the firm's application as submitted is inconsistent with the required factors under the law.  Custodia is a special purpose depository institution, chartered by the state of Wyoming, which does not have federal deposit insurance. The firm proposed to engage in novel and untested crypto activities that include issuing a crypto asset on open, public and/or decentralized networks.  The firm's novel business model and proposed focus on crypto-assets presented significant safety and soundness risks. The Board has previously made clear that such crypto activities are highly likely to be inconsistent with safe and sound banking practices. The Board also found that Custodia's risk management framework was insufficient to address concerns regarding the heightened risks associated with its proposed crypto activities, including its ability to mitigate money laundering and terrorism financing risks.  In light of these and other concerns, the firm's application as submitted was inconsistent with the factors the Board is required to evaluate by law. The Board's order will be released following a review for confidential information."

And when will that be? And when the FOIA response on the promised expedited timeline?

January 23, 2023

Fed speak - but no live questions: "What: Federal Reserve Bank of Dallas President & CEO Lorie Logan will speak about U.S. economic outlook and monetary policy at the McCombs School of Business at The University of Texas at Austin. Logan took office last August, and with this speech she will introduce the monetary policy objectives that will guide her tenure. When: Wednesday, Jan. 18, 2023 4-4:05 p.m., Texas McCombs Dean Lillian Mills, welcome and introduction. 4:05-4:30 p.m., Dallas Fed President & CEO Lorie Logan. 4:30-4:45 p.m., Q&A moderated by Julia Coronado, Texas McCombs clinical associate professor of finance; time will not allow for live questions"

January 16, 2023

NY Fed Dissolved TRO to Fire Unvaccinated Staff Now Fed Accuses Lawyer of Contacts

By Matthew Russell Lee, Patreon Maxwell Book
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Jan 13 – The Federal Reserve Bank of New York wants to fire longtime employees Lori Gardner-Alfred of The Bronx and Jeanette Diaz of Bayonne, New Jersey for not being vaccinated against COVID-19. And now it may be able to.

  The two women won a temporary restraining order in New York State court. But the FRBNY removed the case to Federal court and Friday argued to dissolve the TRO and fire the women, saying that their harm is not irreparable.      

       On March 4, U.S. District Court for the Southern District of New York Judge Lewis J. Liman held a proceeding. Inner City Press covered it.  

 FRBNY in-house lawyer Alex Leonard argued the TRO should be immediately lift. The women, representing themselves, asked for time to respond to the papers the Fed, their employer for decades, had just given them.

  Judge Liman to his credit did give them time, until Sunday to file their response to his chambers by email. Then, it should be docketed.

   Jeanette Diaz asked about the FRBNY's definition and denial of religious exemptions. Judge Liman said perhaps Mr. Leonard could answer. But he said no, that would be getting in to the merits and the Fed's focus was getting the TRO dissolved and presumably firing the employees.

  On March 7, Judge Liman heard from the parties again. Inner City Press live tweeted here:

now staffers the Federal Reserve Bank of NY wants to fire for being unvaccinated are before SDNY Judge Liman as they were Friday. FRBNY lawyer: Now plaintiffs over the weekend make a a Constitution argument. But the New York Fed is not a government agency.

[Inner City Press: Then how does NY Fed approve bank mergers? See, FRBNY Approves Berkshire Bank With NTI Rating, here

Judge Liman: Even if discrimination were being alleged, would an injunctions be issues? NY Fed staffer's new/1st lawyer: The very pressure put on these plaintiffs to abandoned their bona fide religious beliefs is irreparable harm, per se

Judge Liman: What do you say about the NY Fed not being a state agency? Lawyer: They removed to this court by saying that are an organ of the Federal government...  [And, the Fed Board had this "non government agency," owned by banks, approving bank mergers]

 Lawyer: On the merits we have this Federal Reserve agency, now trying to revoke the religious exemption based on their job titles. These jobs could be performed remotely. Or, in the office a few days a week.


Lawyer: The Fed has granted others an ongoing exemption. That burden is on the Fed to offer up some justification. Judge Liman: What about irreparable harm?

Lawyer: There's the Northern District of NY case...  Judge Liman: Citation? Lawyer: 17 F.4th 368, 370

 NY Fed's Leonard: He says we are forcing them to violate their religious beliefs. But it is a condition of employment. They got a temporary accommodation, but there's no longer a reasonable one. We understand that's difficult. See, the Hawaii Airlines case.

 NY Fed's Leonard: They did not claim in their state court submission any free exercise violation. NY Fed is not a government agency.  Judge Liman: Authority for that? A: Uh, uh, NY Fed's employment actions are not state action. Judge: Cases? A: Nothing on point.

NY Fed's Leonard: There is no irreparable harm.

Judge Liman: I'm going to take this under advisement. I will render a decision quite quickly. Expect to hear from me soon. Plaintiffs' lawyer: There's a case, Agricultural Bank of China, 2016 WL 27566661

 NY Fed's Leonard: US v. Wells Fargo case, while not on point, the Federal Reserve Bank for the purpose of emergency lending are government agencies, but by implication, not as employers. Plaintiffs' lawyer: 24 hours for an interlocutor appeal? NY Fed: We object. ]

NY Fed's Leonard: We are doing this in the middle of pandemic. We shouldn't be restrained any longer. Judge Liman: Do you want to dismiss the complaint under 12(b)(6)? NY Fed: There's no complaint, it's futile. Yes, dismiss. Judge Liman: I'm asking about process.

 NY Fed's Leonard: We'll submit more papers in 2 weeks.

Judge Liman: Reply by April 11. We are adjourned.

On March 11, this: "ORDER granting in part [7] Motion Emergency Motion to Dissolve Ex Parte Temporary Restraining Order and Dismiss . Accordingly, the TRO is dissolved as improperly issued under Rule 65. See Rabbi Jacob Joseph School v. Province of Mendoza, 342 F. Supp. 2d 124, 127 (E.D.N.Y. 2004) ("The temporary restraining order that was issued without notice to the attorney for the Defendant whose identity was known, without declaring in an affidavit or verified complaint that immediate and irreparable harm would result before the adverse party or his attorney could be heard in opposition, was plainly in violation of Fed.R.Civ.P. 65(b), and the temporary restraining order was vacated for the additional reason that it was improperly issued."); Dolan v. Portaro, 2015 WL 3444351, at *1 (N.D. Ohio May 28, 2015) ("Had Plaintiff Dolan initially filed this case in this Court, the TRO could not have been granted. When the motion for a TRO was first made in state court, Plaintiff's counsel did not provide the required certification as to what efforts were made to give notice and why notice should not be required. Nor did Plaintiff's counsel file such certification in this Court after removal. That deficiency alone justifies dissolving the TRO."). Moreover, "[o]n this motion to dissolve a temporary restraining order,... the party that obtained that order... bears the burden of justifying continued injunctive relief." Gardner v. Weisman, 2006 WL 2423376, at *1 (S.D.N.Y. Aug. 21, 2006) (internal quotation marks omitted) (quoting SC Cowen Sec. Corp. v. Messih, 2000 WL 663434, at *1 (S.D.N.Y. May 17, 2000)). The FRBNY argues that the evidence submitted by Plaintiffs does not satisfy that burden, because they have not shown irreparable harm, a likelihood of success, or a balance of hardships in their favor, as further set forth herein. Plaintiffs also have not demonstrated a likelihood of success on the merits of their claims; their operative pleadings are wholly conclusory, and their arguments regarding a likelihood of success on the merits again hinge entirely on the Free Exercise claims, Dkt. No. 14 at 5; once again, the operative pleadings assert no Free Exercise claims. As such, Plaintiffs have not carried their burden of justifying continued injunctive relief. For this additional reason, the TRO must be dissolved."

  On March 21 the New York Fed filed a motion to dismiss, leading that "the New York Fed - part of the nation's central bank and a federal instrumentality established pursuant to the Federal Reserve Act of 1913 is not a state agency whose decisions are subject to review under Article 78."

On June 21 Judge Liman held another proceeding. He said he did not anticipate granting a motion to dismiss, but also doubted in a preliminary injunction, given that the staffers have already been fired. (The Fed's lawyer slipped in that the Fed doubts that the lead plaintiff's beliefs are religious).

Judge Liman told counsel to discuss with their clients the option of an expedited hearing on a permanent injunctions. A case management plan is due July 8, with another conference set for July 18 at 2 pm. 

  Inner City Press covered the July 18 conference; there was a request for a trial in January but a decision to hold it in May. Then into the docket this: "ORDER deferring ruling on [27] Motion for Preliminary Injunction. Upon consent of the parties at Dkt. No. 41, the hearing on Plaintiffs' motion for a preliminary injunction will be consolidated with a trial on the merits pursuant to Federal Rule of Civil Procedure 65(a)(2). (HEREBY ORDERED by Judge Lewis J. Liman)."

As the weather grows colder, the plaintiffs' lawyer seek to leave them. Judge Liman ruled: "ORDER: On October 28, 2022, plaintiffs Jeanette Diaz and Lori Gardner ("Plaintiffs") emailed the Court asking if they could be represented by counsel at the conference scheduled for Thursday, November 3, 2022 at 2:00 p.m. The Court has not granted Plaintiffs' counsel's motion to withdraw. Accordingly, if Plaintiffs wish to communicate with the Court, they should do so through counsel and file the communication on the docket on ECF. SO ORDERED. (Signed by Judge Lewis J. Liman on 10/28/2022)."

On January 13, 2023, Judge Liman held another conference in the case, about discovery. But the Federal Reserve's lawyer dropped a bombshell, claiming that plaintiffs' counsel did not in fact have any agreement with the clients to actually produce discovery - and was communicating through a New York Fed staffer, William Christie. Even before the oral bombshell, the Fed's January 11 letter to Judge Liman roundly critiqued plaintiffs' counsel. We aim to have more on this.

Inner City Press will continue to cover the case and the Fed.

We will have more on this. The case is Gardner-Alfred, et al. v. Federal Reserve Bank of NY, 22-cv-1585 (Liman)

January 9, 2023

The Federal Reserve under the Change in Bank Control Act - the same one use or misused on its watch for FTX / Alameda to buy into Farmington State Bank now Moonstone - has declined to extend the comment period on: "Dear Mr. Lee: This concerns your correspondence dated December 6, 2022, regarding the notice filed under the Change in Bank Control Act of 1978, as amended (“CIBC Act”), 1 by (1) the Estate of Steven B. Schnall, Sherri Silver Schnall, as Preliminary Executor, both of New York, New York, to retain voting shares of Quontic Bank Acquisition Corp. (“QBAC”) and Quontic Bank Holdings Corp. (“QBHC”), and thereby retain voting shares of Quontic Bank, all of New York, New York; and (2) the Schnall Disclaimer Trust A, Sherri Silver Schnall, individually and as co-trustee, both of New York, New York, with Amie Hoffman, as co-trustee, New Hope, Pennsylvania; and the Sherri S. Schnall Family Irrevocable Trust, Amie Hoffman as trustee, both of New Hope, Pennsylvania, to acquire voting shares of QBAC and QBHC, and thereby indirectly acquire voting shares of Quontic Bank, all of New York, New York. You requested an extension of the comment period for this proposal. Notices were published in the Federal Register (November 21, 2022) and in the relevant newspaper of general circulation (the New York Daily News (October 31, 2022)) providing commenters until December 6, 2022, a total of 36 days, to submit their views on all aspects of the proposal. This period provided sufficient time for interested persons to prepare and submit their comments. The Board provides a public comment period for notices to provide interested persons the opportunity to submit information and views related to the statutory factors it 1 12 U.S.C. § 1817(j).  2  must consider under the CIBC Act. The Board’s Rules of Procedure (“Rules”)2 also establish a framework, based on the schedules followed by many courts, that limits iterative responses between applicants and commenters. The Rules contemplate that the public comment period will not be extended absent a clear demonstration of hardship or other meritorious reason for seeking additional time. Your request for additional time to comment does not identify circumstances that would warrant an extension of the public comment period for this proposal. Based on all the facts of record, including the reasons discussed above, I have determined, acting pursuant to authority delegated by the Board (12 CFR 265.5(a)(2)), not to extend the public comment period. Any comments received on or before December 6, 2022, have been made part of the record of the proposal that will be reviewed by the Board" Watch this site.

January 2, 2023

  While Inner City Press looks into how the Federal Reserve allowed FTX / Alameda to buy into Farmington State Bank / Moonstone Bank, it commented to the Fed on "Notice of Change in Bank Control (the “Notice”) by (i) the Estate of Steven B. Schnall, Sherri Silver Schnall as Preliminary Executor, both of New York, New York; to retain voting shares of Quontic Bank Acquisition Corp., and Quontic Bank Holdings Corp., all of New York, New York, and (ii), the Schnall Disclaimer Trust A, Sherri Silver Schnall, individually, and as co-trustee, both of New York, New York, with Amie Hoffman, as co-trustee, New Hope, Pennsylvania; and the Sherri S. Schnall Family Irrevocable Trust, Amie Hoffman as trustee, of New Hope, Pennsylvania (all parties to (i) and (ii) together, the “Notificants”); to acquire voting shares of Quontic Bank Acquisition Corp., and Quontic Bank Holdings Corp., and thereby indirectly acquire voting shares of Quontic Bank."

  Note that beyond its crypto rewards program, Quontic "has become the latest of a handful of US-based financial institutions to have agreed to work with the cryptocurrency sector... It opened a checking account for an unnamed Bitcoin ATM firm--its first crypto client--several weeks ago, and claims to be in contract negotiations to open accounts for another new cryptocurrency company, which was also unnamed."

 And how did Quontic respond to Inner City Press' comment? With pure arrogance. We'll have more on this. Watch this site.

  And how did Quontic,December 26, 2022

On FTX Wreck Federal Reserve FOIAed by on Moonstone Bank & Others By Inner City Press

By Matthew Russell Lee, Patreon

SDNY COURTHOUSE, Dec 22 – Amid the prosecution of Samuel Bankman-Fried on wire fraud, money laundering and campaign finance violation charges, the role of the Federal Reserve is coming to the fore. 

 Inner City Press was unsurprised to learn of Fed laxity as Alameda invested in Farmington State Bank, renamed Moonstone Bank.

Inner City Press submitted to the Federal Reserve a Freedom of Information Act request including: "This is a FOIA request for all record regarding the FRS' approval for the application / request for membership in the Federal Reserve System by Farmington State Bank (giving rise to FRBSF president Daly's approval on a delegated basis in 2021), and the subsequent renaming of the bank to Mooonstone and taking of a stake by FTX/Alameda.  Also, for Silvergate with its FTX connections, record reflecting any review by the FRS of Silvergate's (and Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank, Customers Bancorp Inc.) of the banks' connections with crypto-currency firms... This is a request for expedited treatment, in light of the indictment of FTX / Alameda's Sam Bankman-Fried and Caroline Ellison (cooperating), and an upcoming January 3, 2023 hearing."

The Federal Reserve has so far acknowledged receipt: "Your request has been assigned number FOIA-2023-00178. Please reference this number in all future correspondence.    Request description:  This is a FOIA request for all record regarding the FRS' approval for the application / request for membership in the Federal Reserve System by Farmington State Bank [also] any review by the FRS of Silvergate's (and Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank, Customers Bancorp Inc.) of the banks' connections with crypto-currency firms."

Update: expedited processing has rightly been granted. So, waiting for the documents...

December 17, 2022

Does the Fed waiting until 4:30 pm on a comment period that ends at 5 pm to provide a copy of a bank's application requested a week ago meet any standard? We'll have more to say about Lakeland - Provident...

Brookline Bank Bid To Bring Disparities To NY By Buying PCSB Bank Rubber Stamped by Fed

By Matthew Russell Lee, Patreon Maxwell Book
BBC-Guardian UK - Honduras - ESPN NY Mag

SOUTH BRONX, Dec 15 –  New York and Massachusetts are portrayed as diverse and progressive places. But their banks, not so much. 

 Consider for example the proposed and today FRB approved merger between Brookline Bank in Massachusetts and PCSB Bank in New York, with branches in Mount Vernon, Eastchester and elsewhere.  

The Federal Reserve, while withholding beyond the comment period even the public portion of the application involving Lakeland Bank, with settled lending discrimination charges recently with DOJ, on December 15 rubber stamped Brookline's application, with this line: "The commenter objected to the proposal, alleging that in 2021, Brookline Bank made fewer home loans to African American individuals as compared to white individuals." They don't name the commenter - Inner City Press / FFW.

Bronx-based Inner City Press has long exposed redlining. Along with Fair Finance Watch it finds that in 2020, the most recent year for which Home Mortgage Disclosure Act data is publicly available, PCSB Bank in New York State made 79 loans to whites - and only seven to African America. The dollar volume difference is even worse, a twenty to one disparity.  

So what is the lending record in Massachusetts of Brookline Bank, the proposed acquirer of PCSB?

Well, Brookline Bank in 2020 made 456 loans to whites and only FOUR to African Americans. Meanwhile it denied fully 11 applications from African Americans, and only 93 from whites. 

December 12, 2022

On December 9, Inner City Press filed with the Federal Reserve, in both NY and DC, asking for a copy of the Provident - Lakeland application that day. As of December 10, none has been provided. This is unacceptable - what this site.

December 5, 2022

Friday news dump from the Fed, Dec 2, 2022: The Federal Reserve Board on Friday invited public comment on proposed principles providing a high-level framework for the safe and sound management of exposures to climate-related financial risks for large banking organizations.  The proposed principles would apply to banking organizations with more than $100 billion in total assets and address both the physical risks and transition risks associated with climate change. The proposed principles would cover six areas: governance; policies, procedures, and limits; strategic planning; risk management; data, risk measurement and reporting; and scenario analysis.  The proposed principles are substantially similar to proposals issued by the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, and the Board intends to work with those agencies to promote consistency in the supervision of large banks through final interagency guidance. Comments will be accepted for 60 days

November 28, 2022

The Federal Reserve wrote to Citigroup, which it has let abuse consumers for years, on November 22 thusly: Citigroup "must, on or before January 31, 2023, submit to the Agencies (1) a mapping document that identifies the actions in the GARP that are expected to improve the firm’s ability to accurately produce key data in a timely manner that would be relied upon to execute its resolution plan (Resolvability Data Mapping), (2) a detailed description of how each of the actions identified in the Resolvability Data Mapping will improve the firm’s ability to accurately produce data in a timely manner 13 The 2021 Targeted Plan also claimed that certain financial resource buffers and assumptions the Covered Company views as conservative about resolution-related capital and liquidity are sufficient to mitigate any effect of the data integrity and quality issues on the firm’s resolution capabilities. 7 integral to execution of the firm’s resolution strategy and which of these actions (either individually or in combination with other actions) the Covered Company anticipates will result in the greatest material improvement to the firm’s resolution capabilities and that accordingly are a priority for the firm, and (3) a detailed description of how the Covered Company will demonstrate, to itself and the Agencies, that the improvements to its data governance program will result in more accurate and timely data integral to execution of the firm’s resolution strategy (2 and 3 together, the Remediation Actions and Evaluations Descriptions). The shortcoming will remain outstanding until the Covered Company addresses the remedial actions in the Resolvability Data Mapping."

November 21, 2022

The Fed issued a correction to Gov Bowman's Nov 17 speech: "Note: A previous version of this speech incorrectly attributed statistics in paragraph 9 to the Survey of Household Economics and Decisionmaking (SHED). On November 17, this paragraph was updated to correctly attribute these numbers to the Survey of Consumer Finances."

November 14, 2022

The Fed in its new Supervision and Regulation Report brags about FedEZFile and its "two way messaging" with applicant banks - without addressing how the Ex Parte Rules apply to it. We aim to have more on this.

November 7, 2022

BMO Harris BNP Faced Fed Qs After Admitting Mislabeling Info Now Promises, Promises

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FED COURT / S Bronx, Nov 2 – Whether or not the U.S. Community Reinvestment Act will actually be enforced under the Administration and its regulators remains an open question. Consider: Inner City Press immediately reported that BMO Harris' application to buy Bank of the West and its more than 500 branches from BNP would be a litmus test.

 Fair Finance Watch noted, from Day 1, that in 2020 BMO Harris denied many more mortgage applications from African Americans than it approved: 509 denied versus only 223 loans made to African Americans, nationwide. BMO's numbers for whites were the reverse: 9270 loans made, versus less then six thousand denials. As noted, there are also climate and secrecy issues. Fair Finance Watch and other raised branch closings.

On October 14, the banks' counsel sent Fair Finance Watch what purported to be a copy of its submission to the Fed under the Ex Parte Rules -- but the entire thing was withheld, under this cover message: "Attached is the public portion of the BMO response to the Federal Reserve Bank of Chicago’s request for additional information received on October 3, 2022.      Please feel free to reach out to me with any questions.     Best,  Ro     Ro Spaziani Wachtell, Lipton, Rosen & Katz."  No substance was attached, just a request for confidential treatment

This is outrageous. The Fed itself should make these exhibits public.

On October 17, the Fed sent Fair Finance Watch a copy of letter to "Ro" - "Dear Ro: Please provide a response including supporting documentation, to the following request: 1. Provide the cover page for the FR Y-3F and responses to any questions that were not already covered in the initial FR Y-3 filing. Provide your response by October 25, 2022, eight business days from the date of this letter."

On October 26, belatedly more formal, the Fed asked: "Dear Rosemary:  Please provide responses to each of the following requests. Supporting documentation, as appropriate, should be provided... Describe whether the combined banking organization would expand upon each bank’s community development activities if the proposal is consummated, and identify those community development activities."

On November 2, to that, this: "Describe whether the combined banking organization would expand upon each bank’s community development activities if the proposal is consummated, and identify those community development activities. BHB is in the final stages of completing a Community Benefit Plan that will cover the first five years after consummation of the Proposed Transaction. In connection with that plan, BHB will increase its overall level of community development lending, investments and philanthropic giving above current levels. When considering its qualified community development lending, investments and philanthropy during the five year plan period, BHB will prioritize investments in affordable housing, rural housing needs, economic development, workforce development, sustainability, digital inclusion and financing for homeowners and small businesses. BHB will be in a position to share the Community Benefit Plan shortly.  3  The Proposed Transaction will expand the combined organizations community development activities in a number of ways. BHB has an experienced community development team that lend to and invest in affordable housing and economic development projects and will bring their expertise and innovative approach to affordable housing, revitalization and economic development to the BOTW markets. With respect to community development lending, BHB and BOTW both provide loans in connection with Low Income Housing Tax Credit (“LIHTC”) financing products. However, BHB also owns a “qualified Community Development Entity” (“CDE”), which allocates federal new market tax credits (“NMTC”) for economic development and social service projects. As a combined organization, BHB’s CDE would expand its allocation focus to BOTW’s footprint and surrounding rural markets. BHB will also continue to support government, non-profit and middle market lending that benefit LMI communities and communities of color. BHB will continue to expand its investments in bonds to school districts and municipalities that assist with infrastructure for LMI communities or constituents, and loans to municipalities to aid with infrastructure and other needs, especially those that benefit LMI geographies or other underrepresented groups. With respect to community development investments, both BHB and BOTW currently invest in LIHTCs, which BHB will continue following closing. BHB is also an active investor in asset classes beyond those of BOTW’s, with investments in CRA-qualified private equity funds, Small Business Investment Company-licensed funds, loan funds and Community Development Financial Institutions. The combined organization will increase BHB’s current investment activity in these asset classes to target BOTW’s CRA assessment areas. In addition to the foregoing, BHB recognizes that organizations led by women and persons of color face obstacles in attracting funding and investments, and BHB will prioritize its philanthropic giving to these organizations where possible. In connection with the upcoming Community Benefit Plan, BHB will reserve 75% of its philanthropic commitment for endeavors that serve minority organizations or communities, or are led by people of color or women. In connection with the Community Benefit Plan, BHB will support at least 75 organizations it has not supported in the past over the five years of the plan, with at least 10 new philanthropic partnerships in BHB’s top three states by deposits (IL, CA and WI) and five new philanthropic partnerships in next four top states by deposits (MN, AZ, CO and IN). BHB also will work to increase the average size of CRA-qualified grants from an average of approximately $32,000, to an average of $40,000-50,000 by the end of the five year plan period."

October 31, 2022

BMO Harris BNP Faced Fed Qs After Admitting Mislabeling Info Now 4 More Questions

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FED COURT / S Bronx, Oct 26 – Whether or not the U.S. Community Reinvestment Act will actually be enforced under the Administration and its regulators remains an open question. Consider: Inner City Press immediately reported that BMO Harris' application to buy Bank of the West and its more than 500 branches from BNP would be a litmus test.

 Fair Finance Watch noted, from Day 1, that in 2020 BMO Harris denied many more mortgage applications from African Americans than it approved: 509 denied versus only 223 loans made to African Americans, nationwide. BMO's numbers for whites were the reverse: 9270 loans made, versus less then six thousand denials. As noted, there are also climate and secrecy issues. Fair Finance Watch and other raised branch closings.

On October 26, belatedly more formal, the Fed asked: "Dear Rosemary:  Please provide responses to each of the following requests. Supporting documentation, as appropriate, should be provided. 1. With respect to the Transitional Services and Reverse Transitional Services Agreements (“Agreements”), the March 9, 2022 request for additional information requested copies of the draft and final Agreements, when available. On August 23, 2022, BMO Stated the final Agreements would be completed shortly and provided to the Board of Governors within the following weeks. Provide copies of the draft or final agreements if available. If these are currently unavailable, provide an update on when the Agreements will be available. 2. Confirm whether BHB plans to close, consolidate, or relocate any BHB branches in connection with the Proposed Transaction.  3. The March 11, 2022, response to commenters states “the combined banking organization will continue to offer both (a) a wide array of deposit, checking and loan products (including Bank On certified products) and (b) broad access to programs with features that are available to assist [low- and moderate-income (LMI)] and minority individuals.” Provide greater detail regarding the products and services that the combined organization would offer to meet the convenience and needs of the communities to be served by the combined organization, including LMI individuals and communities. In addition, identify if there are any programs, products, or services offered by BOTW, but not currently offered by BHB, that would be made available by the combined banking  organization if the proposal is consummated, and would help to meet the needs of LMI customers. 4. Describe whether the combined banking organization would expand upon each bank’s community development activities if the proposal is consummated, and identify those community development activities."

Watch this site.

October 24, 2022

BMO Harris BNP Faced Fed Qs After Admitting Mislabeling Info Now Another Question

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FED COURT / S Bronx, Oct 17 – Whether or not the U.S. Community Reinvestment Act will actually be enforced under the Administration and its regulators remains an open question. Consider: Inner City Press immediately reported that BMO Harris' application to buy Bank of the West and its more than 500 branches from BNP would be a litmus test.

 Fair Finance Watch noted, from Day 1, that in 2020 BMO Harris denied many more mortgage applications from African Americans than it approved: 509 denied versus only 223 loans made to African Americans, nationwide. BMO's numbers for whites were the reverse: 9270 loans made, versus less then six thousand denials. As noted, there are also climate and secrecy issues. Fair Finance Watch and other raised branch closings.

On October 14, the banks' counsel sent Fair Finance Watch what purported to be a copy of its submission to the Fed under the Ex Parte Rules -- but the entire thing was withheld, under this cover message: "Attached is the public portion of the BMO response to the Federal Reserve Bank of Chicago’s request for additional information received on October 3, 2022.      Please feel free to reach out to me with any questions.     Best,  Ro     Ro Spaziani Wachtell, Lipton, Rosen & Katz."  No substance was attached, just a request for confidential treatment

This is outrageous. The Fed itself should make these exhibits public.

On October 17, the Fed sent Fair Finance Watch a copy of letter to "Ro" - "Dear Ro: The following additional information request relates to the application filed by Bank of Montreal, Montreal, Canada, and BMO Financial Corp., Wilmington, Delaware, the parent companies of BMO Harris Bank National Association, Chicago, Illinois, to acquire 100 percent of BancWest Holding Inc. and thereby indirectly acquire Bank of the West, both of San Francisco, California, pursuant to section 3 of the Bank Holding Company Act of 1956. Please provide a response including supporting documentation, to the following request: 1. Provide the cover page for the FR Y-3F and responses to any questions that were not already covered in the initial FR Y-3 filing. Provide your response by October 25, 2022, eight business days from the date of this letter." Watch this site.

October 17, 2022

Talk about burying or hiding the lede -- the Federal Reserve on October 14 sent Fair Finance Watch a letter saying it had approved the $8 billion merger of US Bank and MUFG, "order attached." But there was no order attached. And none was listed on the Board's website - except, it was hidden in announcement about a comment period. This is not public notice and does not set the 15 day waiting period to request reconsideration running....

October 10, 2022

The Fed announced - only to banks? - that "The Federal Reserve Board announced on Thursday that it will replace its current bank application filing system with a new and upgraded system later this month. The substantive requirements of applications will remain the same with the new system making the filing process more intuitive and minimizing paper applications and communications.  The new cloud-based system, known as FedEZFile, will provide real-time status tracking, two-way messaging, and digitally signed documents for applications. An "Ask the Fed" webinar on the new system will be scheduled at a later date." Will it make commenting for the public, and transparency, easier? Watch this site.

October 3, 2022

Now Governor Bowman, who urged banks to rally against CRA proposal even after the comment period for others closed, wants to further loosen merger review, saying last week that "if that framework does not account for the full range of competitors, we’re only restricting banks from making strategic merger choices, while allowing those outside the framework to proliferate.” So, she says, throw in fintechs. We say no. Watch this site.

September 26, 2022

Now the Federal Reserve is belated providing Inner City Press will portions of merger applications wrongfully approved - but only after the comment period long ago closed. This is a scam and must be fixed.

September 19, 2022

Annals of Fed FOIA: "Good afternoon Mr. Lee,     We received your message indicating that you were having issues with locating documents related to FOIA request FOIA-2022-00004 in your account in the Board’s FOIA portal system.  Your documents for FOIA-2022-00004 have been emailed to you in a separate email, however, I wanted to circle back with you on the account issue.  After reviewing account and access data information, we’ve become aware that you have 4 accounts in our system." Onward toward transparency - even on the Fed's great delay.

September 12, 2022

The Federal Reserve sent out Toronto Dominion's purported response to substantive issues raised at the Fed's public meeting - but the response did not address the consumer abuse issues raised, and it appears that Fed has not asked about them, just as it never asked MUFG about its Russian business. Does Barr mean business? We'll see.

September 5, 2022

BMO Harris BNP Face Fed Qss After Admitting Mislabeling Info Now Confidential Answers

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FED COURT / S Bronx, Sept 2 – Whether or not the U.S. Community Reinvestment Act will actually be enforced under the Administration and its regulators remains an open question. Consider: Inner City Press immediately reported that BMO Harris' application to buy Bank of the West and its more than 500 branches from BNP would be a litmus test.

 Fair Finance Watch noted, from Day 1, that in 2020 BMO Harris denied many more mortgage applications from African Americans than it approved: 509 denied versus only 223 loans made to African Americans, nationwide. BMO's numbers for whites were the reverse: 9270 loans made, versus less then six thousand denials. As noted, there are also climate and secrecy issues. Fair Finance Watch and other raised branch closings.

On August 23-4 the Fed has asked questions.

Late on September 2, the banks submission answers - referring repeated to withheld "Confidential" exhibits:

"a. Copies of policies and procedures for BHB’s new overdraft program; 

See Confidential Exhibits A-1 thru A-15 for the policies and procedures  related to BHB’s overdraft practices.  

8. Provide pro forma asset quality information, including total allowance for loan losses for BFC and BHB, as of March 31, 2022. Include a discussion of why the proposed level of capital and loan loss reserves would be adequate to support the level of nonperforming assets following consummation of the proposed transaction. 

See Confidential Exhibit B. 

 9. Provide actual and pro forma risk-based capital ratios (and supporting documentation) calculated according to CECL as of March 31, 2022.

 See Confidential Exhibit C.  

10. The original filing stated that there would be no changes to the board of directors of Bank of Montreal; however, the directorate of BFC and BHB will include some representation from BOTW’s current board of directors. Provide an update as to who has been or will be asked to join the directorate of BFC and BHB and include a 7  brief background on the individuals and the timeline of when they will join post  consummation. In addition, please confirm that there are still no contemplated  changes to the Bank of Montreal directorate.  

See Confidential Exhibit D.."

This is outrageous. The Fed itself should made these exhibits public. Watch this site.

August 29, 2022

BMO Harris BNP Face Fed Questions Here As Admit Mislabeling Info Confidential, Misled

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, August 24 – Whether or not the U.S. Community Reinvestment Act will actually be enforced under the Administration and its regulators remains an open question. Consider: Inner City Press immediately reported that BMO Harris' application to buy Bank of the West and its more than 500 branches from BNP would be a litmus test.

 Fair Finance Watch noted, from Day 1, that in 2020 BMO Harris denied many more mortgage applications from African Americans than it approved: 509 denied versus only 223 loans made to African Americans, nationwide. BMO's numbers for whites were the reverse: 9270 loans made, versus less then six thousand denials. As noted, there are also climate and secrecy issues. Fair Finance Watch and other raised branch closings.

Now on August 23-4 the Fed has asked questions:

"BHB’s and BOTW’s business models do not align and thus the approval of this transaction would result in branch closures. Discuss BHB’s plans to integrate BOTW’s existing branches pursuant to BHB’s overall business strategy. Specifically discuss the function of retail branches in the anticipated strategy and business model of the combined organization. 2. Discuss whether BHB plans to close any branches or relocate or consolidate any BOTW or BHB branches in connection with the proposed transaction. 3. One commenter raised concerns that BHB would discontinue BOTW’s CRA programs in California following the merger. Discuss BHB’s plans with respect to BOTW’s CRA community development activities in California following consummation of the proposed transaction, including loans, investments, and services.

4. Multiple commenters raised concerns that BOTW did not engage in enough philanthropic activities when compared to similar institutions. Please respond to these allegations. 5. Provide a list of organizations and community groups, if any, with which BHB engaged since 2020 to help reach African American and Hispanic borrowers in Minneapolis, Minnesota and the State of Wisconsin. If applicable, provide detailed information regarding such partnerships. In addition, provide information about BHB’s current and planned efforts to reach African American and Hispanic borrowers in Minneapolis, Minnesota and the State of Wisconsin, including specialized products and marketing campaigns. 

6. Please provide a list of organizations and community groups, if any, with which BOTW engaged since 2020 to help reach African American and Hispanic borrowers in Denver, Colorado, San Francisco California, and the State of California. If applicable, provide detailed information regarding such partnerships. In addition, provide information about BOTW’s current and planned efforts to reach African American and Hispanic borrowers in Denver, Colorado, San Francisco, California, and the State of California, including specialized products and marketing campaigns.

7. Provide further information on BHB’s plans on changing its overdraft practices, including: a. Copies of policies and procedures for BHB’s new overdraft program; b. Information on the procedure for when an account is overdrawn for an extended period; c. The definition of “extended period”; d. Whether customers can incur consecutive day overdraft fees if the account is overdrawn within the extended period; and e. Whether BHB’s Compliance staff has reviewed the bank’s revised overdraft policy, procedures, and communications to existing and potential customers."  We'll have more on this.

August 22, 2022

The Fed has asked US Bancorp... a confidential question: "Provide an updated version of Confidential Exhibit 13 (GSIB Score Information) from the Confidential Exhibits to the Application. Please update the exhibit with data as of June 30, 2022. Please provide your response via E-Apps within eight business days of this letter. Any information for which confidential treatment is desired should be so labeled and separately bound in accordance with section 261.17 of the Board’s Rules Regarding Availability of Information, 12 CFR 261.17." Yeah...

August 15, 2022

A recent, much delayed FOIA response says "In an email message with Mr. Wyatt Eck of the Board’s Legal Division dated June 28, 2022,  you agreed to modify the scope of the second portion of your request to seek “email  communications with First Internet or First Century or either’s affiliates” between the specified  timeframe." Why agree to limit, if it still comes so late?

August 8, 2022

  So while the Fed "deliberated" on US Bancorp, given their fine by the CFPB, does a community group really have to write it make them aware of it? Or would the Fed just call the comment untimely?

August 1, 2022

  The Federal Reserve, already slow on FOIA, has ground to a halt. Now they sent you messages that your request is closed, and to sign in their website to find why. But there, neither determination records nor responsive documents are visible. And reply to the Fed FOIA email just bounces back. FOIA problems solved, from Federal Reserve's perspective! We'll have more on this.

July 25, 2022

NY Fed Dissolved TRO to Fire Unvaccinated Staff, Permanent Injunction Merged into Trial

By Matthew Russell Lee, Patreon Maxwell Book
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, July 20 – The Federal Reserve Bank of New York wants to fire longtime employees Lori Gardner-Alfred of The Bronx and Jeanette Diaz of Bayonne, New Jersey for not being vaccinated against COVID-19. And now it may be able to.

  The two women won a temporary restraining order in New York State court. But the FRBNY removed the case to Federal court and Friday argued to dissolve the TRO and fire the women, saying that their harm is not irreparable.      

       On March 4, U.S. District Court for the Southern District of New York Judge Lewis J. Liman held a proceeding. Inner City Press covered it.  

 FRBNY in-house lawyer Alex Leonard argued the TRO should be immediately lift. The women, representing themselves, asked for time to respond to the papers the Fed, their employer for decades, had just given them.

  Judge Liman to his credit did give them time, until Sunday to file their response to his chambers by email. Then, it should be docketed.

   Jeanette Diaz asked about the FRBNY's definition and denial of religious exemptions. Judge Liman said perhaps Mr. Leonard could answer. But he said no, that would be getting in to the merits and the Fed's focus was getting the TRO dissolved and presumably firing the employees.

  On March 7, Judge Liman heard from the parties again. Inner City Press live tweeted here:

now staffers the Federal Reserve Bank of NY wants to fire for being unvaccinated are before SDNY Judge Liman as they were Friday. FRBNY lawyer: Now plaintiffs over the weekend make a a Constitution argument. But the New York Fed is not a government agency.

[Inner City Press: Then how does NY Fed approve bank mergers? See, FRBNY Approves Berkshire Bank With NTI Rating, here

Judge Liman: Even if discrimination were being alleged, would an injunctions be issues? NY Fed staffer's new/1st lawyer: The very pressure put on these plaintiffs to abandoned their bona fide religious beliefs is irreparable harm, per se

Judge Liman: What do you say about the NY Fed not being a state agency? Lawyer: They removed to this court by saying that are an organ of the Federal government...  [And, the Fed Board had this "non government agency," owned by banks, approving bank mergers]

 Lawyer: On the merits we have this Federal Reserve agency, now trying to revoke the religious exemption based on their job titles. These jobs could be performed remotely. Or, in the office a few days a week.


Lawyer: The Fed has granted others an ongoing exemption. That burden is on the Fed to offer up some justification. Judge Liman: What about irreparable harm?

Lawyer: There's the Northern District of NY case...  Judge Liman: Citation? Lawyer: 17 F.4th 368, 370

 NY Fed's Leonard: He says we are forcing them to violate their religious beliefs. But it is a condition of employment. They got a temporary accommodation, but there's no longer a reasonable one. We understand that's difficult. See, the Hawaii Airlines case.

 NY Fed's Leonard: They did not claim in their state court submission any free exercise violation. NY Fed is not a government agency.  Judge Liman: Authority for that? A: Uh, uh, NY Fed's employment actions are not state action. Judge: Cases? A: Nothing on point.

NY Fed's Leonard: There is no irreparable harm.

Judge Liman: I'm going to take this under advisement. I will render a decision quite quickly. Expect to hear from me soon. Plaintiffs' lawyer: There's a case, Agricultural Bank of China, 2016 WL 27566661

 NY Fed's Leonard: US v. Wells Fargo case, while not on point, the Federal Reserve Bank for the purpose of emergency lending are government agencies, but by implication, not as employers. Plaintiffs' lawyer: 24 hours for an interlocutor appeal? NY Fed: We object. ]

NY Fed's Leonard: We are doing this in the middle of pandemic. We shouldn't be restrained any longer. Judge Liman: Do you want to dismiss the complaint under 12(b)(6)? NY Fed: There's no complaint, it's futile. Yes, dismiss. Judge Liman: I'm asking about process.

 NY Fed's Leonard: We'll submit more papers in 2 weeks.

Judge Liman: Reply by April 11. We are adjourned.

On March 11, this: "ORDER granting in part [7] Motion Emergency Motion to Dissolve Ex Parte Temporary Restraining Order and Dismiss . Accordingly, the TRO is dissolved as improperly issued under Rule 65. See Rabbi Jacob Joseph School v. Province of Mendoza, 342 F. Supp. 2d 124, 127 (E.D.N.Y. 2004) ("The temporary restraining order that was issued without notice to the attorney for the Defendant whose identity was known, without declaring in an affidavit or verified complaint that immediate and irreparable harm would result before the adverse party or his attorney could be heard in opposition, was plainly in violation of Fed.R.Civ.P. 65(b), and the temporary restraining order was vacated for the additional reason that it was improperly issued."); Dolan v. Portaro, 2015 WL 3444351, at *1 (N.D. Ohio May 28, 2015) ("Had Plaintiff Dolan initially filed this case in this Court, the TRO could not have been granted. When the motion for a TRO was first made in state court, Plaintiff's counsel did not provide the required certification as to what efforts were made to give notice and why notice should not be required. Nor did Plaintiff's counsel file such certification in this Court after removal. That deficiency alone justifies dissolving the TRO."). Moreover, "[o]n this motion to dissolve a temporary restraining order,... the party that obtained that order... bears the burden of justifying continued injunctive relief." Gardner v. Weisman, 2006 WL 2423376, at *1 (S.D.N.Y. Aug. 21, 2006) (internal quotation marks omitted) (quoting SC Cowen Sec. Corp. v. Messih, 2000 WL 663434, at *1 (S.D.N.Y. May 17, 2000)). The FRBNY argues that the evidence submitted by Plaintiffs does not satisfy that burden, because they have not shown irreparable harm, a likelihood of success, or a balance of hardships in their favor, as further set forth herein. Plaintiffs also have not demonstrated a likelihood of success on the merits of their claims; their operative pleadings are wholly conclusory, and their arguments regarding a likelihood of success on the merits again hinge entirely on the Free Exercise claims, Dkt. No. 14 at 5; once again, the operative pleadings assert no Free Exercise claims. As such, Plaintiffs have not carried their burden of justifying continued injunctive relief. For this additional reason, the TRO must be dissolved."

  On March 21 the New York Fed filed a motion to dismiss, leading that "the New York Fed - part of the nation's central bank and a federal instrumentality established pursuant to the Federal Reserve Act of 1913 is not a state agency whose decisions are subject to review under Article 78."

On June 21 Judge Liman held another proceeding. He said he did not anticipate granting a motion to dismiss, but also doubted in a preliminary injunction, given that the staffers have already been fired. (The Fed's lawyer slipped in that the Fed doubts that the lead plaintiff's beliefs are religious).

Judge Liman told counsel to discuss with their clients the option of an expedited hearing on a permanent injunctions. A case management plan is due July 8, with another conference set for July 18 at 2 pm. 

  Inner City Press covered the July 18 conference; there was a request for a trial in January but a decision to hold it in May. Then into the docket this: "ORDER deferring ruling on [27] Motion for Preliminary Injunction. Upon consent of the parties at Dkt. No. 41, the hearing on Plaintiffs' motion for a preliminary injunction will be consolidated with a trial on the merits pursuant to Federal Rule of Civil Procedure 65(a)(2). (HEREBY ORDERED by Judge Lewis J. Liman)."

Inner City Press will continue to cover the case and the Fed.

We will have more on this. The case is Gardner-Alfred, et al. v. Federal Reserve Bank of NY, 22-cv-1585 (Liman)

July 18, 2022

According to the Fed's online H2A, as of July 16 there are only three comment periods on applications subject to CRA open: two mergers with public meetings, and one other. Is that possible?

July 11, 2022

On Branch Closures Federal Reserve Withheld Info Then Found It Under FOIA on W Virginia

By Matthew Russell Lee, Patreon Maxwell Book
BBC-Guardian UK - FOIA - ESPN NY Mag

South Bronx / SDNY, July 8 –  Amid a wave of bank branch closings in the US, particularly in lower income areas, during the COVID-19 pandemic, Inner City Press in October 2020 filed a Freedom of Information Act request with the main US regulator, the Federal Reserve, for information about branch closing.  

Tellingly, despite talk about improved community and consumer protection regimes among the bank regulators, the Federal Reserve after 17 months on this FOIA request has told Inner City Press it has only five pages that it will release, about a single Wisconsin branch closure (even then, redacted).

Worse, the Federal Reserve, charged with reigning in swaps and even crypto-currency fraud, says it does not maintain a list of branch closings, as even the OCC does. This is shameful, and must be addressed by the two incoming Governors, and who ever will replace Sarah Bloom Raskin as a Fed nominee.

From the Fed's April 2022 FOIA request to Inner City Press / Fair Finance Watch: 

"This is in response to your electronic message dated and received by the Board’s  Information Disclosure Section on October 20, 2020. Pursuant to the Freedom of  Information Act (“FOIA”), 5 U.S.C. § 552, you seek: electronic records concerning requests to the Federal Reserve  System about branch closings or consolidations in low or moderate  income census tracts including request for public meetings, from  July 4, 2018 to the date of your response.  Your request included an example of a notice by the Federal Reserve Bank of Chicago  (“Reserve Bank”) for a public meeting concerning the notice by Johnson Bank, Racine,  Wisconsin to close its branch located at 2729 18th Street, Kenosha, Wisconsin.

You  further noted that your request also includes: all such meetings held, as well as requests for meetings, direct or  indirect, which were denied, as well as all non-exempt portion of  FRS records reflecting considering and decision making on such  requests.1

1  In an email correspondence with Ms. Katrina Allen Austin of the Board’s Legal Division on  March 23, 2021, seeking clarification about the nature of your request, you noted that “[t]he  OCC, for example, publishes each branch closing in its Weekly Bulletins” and you subsequently  sought FRS “records [of] when public meetings have been requested on branch closings, and  when they have been granted …[separate] out those in LMI communities and where public  meetings were requested and / or granted.” 2

In light of your March 23, 2021, email, staff interpreted your request as seeking  records concerning “branch closings by FRS-supervised institutions (state member  banks) … where public meetings were requested and / or granted” from 2020.2 You may wish to know that the Board does not publish a “list of branch closings”  as the OCC does. Staff searched Board records and located information responsive to  your modified request.  This information is subject to  withholding and will be withheld from you pursuant to exemptions 5 and 6 of the FOIA,  5 U.S.C. §§ 552(b)(5) and (b)(6), respectively. I have also determined that the  information should be withheld because it is reasonably foreseeable that disclosure would  harm an interest protected by an exemption described in subsection (b) of the FOIA, 5  U.S.C. § 552(b). The responsive documents have been reviewed under the requirements  of subsection (b), and all reasonably segregable nonexempt information will be provided  to you. Additionally, approximately 5 pages are being withheld in full. 

Inner City Press appealed - and then (much) later, the Federal Reserve provided documents it had initially withheld or "overlooked," it's phone it in response to a  branch closing by First Community Bank of Bluefield, Virginia at 16 West Main Street,  Richwood, West Virginia; we're putting it on DocumentCloud here and will again be appealing.

  Inner City Press will have more on this.

July 4, 2022

As BMO Harris Seeks Bank of the West For July 14 Federal Reserve Roadblocks and 2bl Speak

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, July 1 – Whether or not the U.S. Community Reinvestment Act will actually be enforced until the new Administration and its regulators remains an open question. Back in December Inner City Press reported that BMO Harris' application to buy Bank of the West and its more than 500 branches from BNP would be a litmus test.

 Fair Finance Watch noted, from Day 1, that in 2020 BMO Harris denied many more mortgage applications from African Americans than it approved: 509 denied versus only 223 loans made to African Americans, nationwide. BMO's numbers for whites were the reverse: 9270 loans made, versus less then six thousand denials.

On May 17 the Federal Reserve and OCC announced that they will at least hold a public meeting: The public meeting will be held virtually on July 14, 2022, at 11:00 a.m. EDT. Members of the public seeking to present oral comments must register by 12:00 p.m. EDT on June 23, 2022, through the online registration webpage."

  Inner City Press / Fair Finance Watch visited the page on June 20, Juneteenth (Observed), in order to register - and found the Fed's "we want to know your views" - in 200 characters. Is that enough? Fair Finance Watch entered: "Concerns: BMO Harris HMDA disparities (nationside in 2020 only 223 mortgages to African Americans, vs. 9270 to whites), its destruction of evidence in a MN bankruptcy case;  BNP's activities in Russia." 

  Next came a series of Federal Reserve emails that went into spam, then a threat that if one didn't appear on screen for the Fed in one of four one-hour windows (three remaining) you couldn't testify. You had to ask to get the WebEx link. Inner City Press signed up - then came, at the same time, an FBI press conference about crypto fraud OneCoin, on which the Fed told Inner City Press under FOIA it has not a single document. Really?

 The penultimate slot conflicts with a press conference by the incoming president of the UN Security Council for July, Brazil. And July 5? The irony is, Inner City Press did this same sign up for the US Bancorp - MUFG public meeting. Why have to do it again? We'll have more on this- watch this site.

June 27, 2022

On Federal Reserve & Antitrust Inner City Press Asks IMF Georgieva Who Cites Concentration

By Matthew Russell Lee, Patreon Maxwell Book
BBC-Guardian UK - Honduras - ESPN NY Mag

SDNY COURT / NYC, June 24 –    When the International Monetary Fund's Managing Director Kristalina Georgieva took a half-dozen questions on June 24 about the IMF's Article IV review of the United States economy, Inner City Press asked her about Federal Reserve transparency and antitrust enforcement. Video here. 

 The Article IV Concluding Statement on the US said, among other things, "Changes to strengthen the Federal Reserve’s communication tools would carry a high payoff in the current conjuncture. In particular, as an alternative to the Summary of Economic Projections, the Federal Reserve could begin publishing, at each policy meeting, an internally consistent economic projection and rate path, produced by Fed staff and potentially endorsed (or  3  otherwise recognized) by the FOMC. The Federal Reserve could also usefully clarify in its Statement on Longer-Run Goals and Monetary Policy Strategy how the policy framework now applies in an environment where inflation has moved well above 2 percent." 

 Inner City Press specifically asked about the Fed's communications in advance of its recent interest rate increase of 75 basis points. Georgieva said that the IMF applauded the move; her staff said that, yes, communications could always improve.

 In response to Inner City Press' question about antitrust enforcement, referencing two large proposed bank mega-mergers (Bank of Montreal to buy BNP Parisbas' Bank of the West, and Toronto Dominion to buy First Horizon - issues exist on each)


IMF staff and M-D said that corporation concentration in the US and elsewhere is becoming a problem.

We'll have more on this.

June 20, 2022

Subpoena Sought in SDNY For Russian Gold Info From KBC Bank and Federal Reserve

By Matthew Russell Lee, Patreon Maxwell Book
BBC-Guardian UK - Honduras - ESPN NY Mag

SDNY COURTHOUSE, June 14 – GMJ Asset Management Company is seeking a discovery order against KBC Bank and the Federal Reserve Bank of New York, for information about Michael Zagrebelny and/or Nicholskiy / St. Nicholas Bank.

It involves, among other things, transfers of gold from Russia. 

 On June 13, 2022 U.S. District Court for the Southern District of New York Judge Ronnie Abrams held a proceeding. Inner City Press covered it.

As Inner City Press has noted, the FRBNY is trying to quash or limit a subpoena for information about the Yemeni Central Bank.

Here, Judge Abrams referred the matter to Magistrate Judge Jennifer E. Willis.

The case is In Re Application of GMJ Asset Management Company Inc., Request for Discovery Pursuant to 28 U.S.C. § 1782, 22-mc-123 (Abrams / Willis)

June 13, 2022

What do the regulators do when there is a too-rare Needs to Improve CRA rating? They ignore it - or better yet, just quickly re-examine and change it. From a recent Federal Reserve order: " in United Texas Bank’s August 3, 2020, CRA performance evaluation, which was not the most current CRA performance evaluation of the bank, 15 it received a rating of “Needs to Improve” under the lending test (“Lending Test”) - and the approved it.

June 6, 2022

While the FDIC took comments on merger review and the OCC talks about it, still nothing, nothing at all from the Federal Reserve. What will the new Governors do? Watch this site.

May 30, 2022

On Federal Reserve governor "Miki" Bowman, Inner City Press has checked the CRA exam of the bank she worked at from 2010 through 2017, Farmers and Drovers, and noted: " Because the assessment areas consist entirely of middle-income geographies, review of the Geographic Distribution criterion would not result in meaningful conclusions. Therefore, this criterion was not evaluated.  The institution did not receive any CRA-related complaints since the previous examination; therefore, this factor did not affect the rating." A bank entirely in middle income geographies... We'll have more on this.

May 23, 2022

As BMO Harris Applies For Bank of the West Now Virtual Public Meeting July 14 Disparities

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, May 17 – Whether or not the U.S. Community Reinvestment Act will actually be enforced until the new Administration and its regulators remains an open question. Back in December Inner City Press reported that BMO Harris' application to buy Bank of the West and its more than 500 branches from BNP would be a litmus test.

 Fair Finance Watch noted, from Day 1, that in 2020 BMO Harris denied many more mortgage applications from African Americans than it approved: 509 denied versus only 223 loans made to African Americans, nationwide. BMO's numbers for whites were the reverse: 9270 loans made, versus less then six thousand denials.

On May 17 the Federal Reserve and OCC announced that they will at least hold a public meeting: "The Federal Reserve Board and the Office of the Comptroller of the Currency (OCC) today announced a joint public meeting on the proposal by Bank of Montreal, Montreal, Canada, and BMO Harris Bank National Association, Chicago, Illinois, to acquire BancWest Holding Inc. and Bank of the West, both of San Francisco, California.  The purpose of the public meeting is to collect information from a wide range of stakeholders as the agencies evaluate the proposed applications. By law, the agencies are required to evaluate:  the convenience and needs of the communities to be served by the combined organization; the insured depository institutions’ performance under the Community Reinvestment Act; competition in the relevant markets; the effects of the proposal on the stability of the U.S. banking or financial system; the financial and managerial resources and future prospects of the companies and banks involved in the proposal; and the effectiveness of the companies and banks in combatting money laundering activities. The public meeting will be held virtually on July 14, 2022, at 11:00 a.m. EDT. Members of the public seeking to present oral comments must register by 12:00 p.m. EDT on June 23, 2022, through the online registration webpage. Further information and requirements to present, as well as information to register to view the public meeting, are available in the attachment from the agencies.  Also today, to give interested parties additional time to comment, the agencies announced that they are extending the public comment period for the applications to the Board and OCC that are associated with the proposal. Comments on the applications will now be accepted through July 19, 2022."

May 16, 2022

Now with two new Governors, what will change at the Fed? An RFI on mergers? More importantly, an end to rubberstamping? We'll see.

May 9, 2022

The Federal Reserve, which constructively denies FOIA request on issues ranging from branch closings to crypto-currency, pretends to be transparent. But why then on its page about interactions with the public is there nothing on consumer protection since 2014? See here.

May 2, 2022

  With Lisa Cook delayed by COVID among those voting, the Fed has STILL not issued the CRA proposal for comment, much less a much needed merger review RFI. Shameful.

April 25, 2022

That even with two new governors coming, those on the Board haven't even put out the CRA proposal, or an RFI on merger review, tells you all you need to know about thatm...

April 18, 2022

On Branch Closures Federal Reserve Withholds Info and Tells Inner City Press No Closure List

By Matthew Russell Lee, Patreon Maxwell Book
BBC-Guardian UK - Honduras - ESPN NY Mag

South Bronx / SDNY, April 11 –  Amid a wave of bank branch closings in the US, particularly in lower income areas, during the COVID-19 pandemic, Inner City Press in October 2020 filed a Freedom of Information Act request with the main US regulator, the Federal Reserve, for information about branch closing.  

Tellingly, despite talk about improved community and consumer protection regimes among the bank regulators, the Federal Reserve after 17 months on this FOIA request has told Inner City Press it has only five pages that it will release, about a single Wisconsin branch closure (even then, redacted).

Worse, the Federal Reserve, charged with reigning in swaps and even crypto-currency fraud, says it does not maintain a list of branch closings, as even the OCC does. This is shameful, and must be addressed by the two incoming Governors, and who ever will replace Sarah Bloom Raskin as a Fed nominee.

From the Fed's April 2022 FOIA request to Inner City Press / Fair Finance Watch: 

"This is in response to your electronic message dated and received by the Board’s  Information Disclosure Section on October 20, 2020. Pursuant to the Freedom of  Information Act (“FOIA”), 5 U.S.C. § 552, you seek: electronic records concerning requests to the Federal Reserve  System about branch closings or consolidations in low or moderate  income census tracts including request for public meetings, from  July 4, 2018 to the date of your response.  Your request included an example of a notice by the Federal Reserve Bank of Chicago  (“Reserve Bank”) for a public meeting concerning the notice by Johnson Bank, Racine,  Wisconsin to close its branch located at 2729 18th Street, Kenosha, Wisconsin.

You  further noted that your request also includes: all such meetings held, as well as requests for meetings, direct or  indirect, which were denied, as well as all non-exempt portion of  FRS records reflecting considering and decision making on such  requests.1

1  In an email correspondence with Ms. Katrina Allen Austin of the Board’s Legal Division on  March 23, 2021, seeking clarification about the nature of your request, you noted that “[t]he  OCC, for example, publishes each branch closing in its Weekly Bulletins” and you subsequently  sought FRS “records [of] when public meetings have been requested on branch closings, and  when they have been granted …[separate] out those in LMI communities and where public  meetings were requested and / or granted.” 2

In light of your March 23, 2021, email, staff interpreted your request as seeking  records concerning “branch closings by FRS-supervised institutions (state member  banks) … where public meetings were requested and / or granted” from 2020.2 You may wish to know that the Board does not publish a “list of branch closings”  as the OCC does. Staff searched Board records and located information responsive to  your modified request.  This information is subject to  withholding and will be withheld from you pursuant to exemptions 5 and 6 of the FOIA,  5 U.S.C. §§ 552(b)(5) and (b)(6), respectively. I have also determined that the  information should be withheld because it is reasonably foreseeable that disclosure would  harm an interest protected by an exemption described in subsection (b) of the FOIA, 5  U.S.C. § 552(b). The responsive documents have been reviewed under the requirements  of subsection (b), and all reasonably segregable nonexempt information will be provided  to you. Additionally, approximately 5 pages are being withheld in full. 

  Inner City Press will have more on this.

April 11, 2022

Fed and Citizens Bank Thumbed Noses At CRA On Investors Bank, Govs Refuse to Reconsider

By Matthew Russell Lee, Patreon Story Order
 BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, April 5 – Whether or not the U.S. Community Reinvestment Act will be again enforced under the current Administration and its regulators is an open question still - though the answer is more and more No.  The proposed acquisition of Investors Bank by Citizens Bank was a litmus test, one that both Citizens and the Fed have failed.

   Investors Bank is one of the most disparate banks in New York State, where in 2020 it made only three mortgage loans to African Americans, while denying fully seven applications from African Americans. By contrast, it made 164 loans to whites while denying only 76 applications from whites.

  Inner City Press raised the 2019 disparities to the FDIC - and on July 30 was contacted by the FDIC that it imposed rare conditions on Investors. Letter here. This was raised on Citizens' applications: "be aware that based on Fair Finance Watch's comments to the FDIC about Investors, it recently imposed a condition on Investors. Investors has yet to meaningfully implement the required improvements; this application should not be approved, much less at this time.    The FDIC wrote:

 "Matthew Lee, Esquire Executive Director Inner City Press/Fair Finance Watch  Dear Mr. Lee: We are writing to inform you that the FDIC approved Investors Bank’s application to acquire eight branches from Berkshire Bank. As part of the application review process, we investigated the issues you raised in your e-mail dated January 19, 2019... The Bank will develop and Board approve an Action Plan within 60 days of the  effective date of this Order to ensure that its home mortgage lending adequately  addresses the credit needs of all segments of its market areas. The Action Plan  should include, at a minimum, the following: a. The Bank will regularly monitor application and origination activity of home  mortgage loans in majority-minority census tracts and from Blacks throughout the  Bank’s assessment areas.  b. The Bank will ensure marketing and outreach efforts are inclusive of all communities,  including minority communities within all the Bank’s assessment areas. The  marketing and outreach efforts should focus on home mortgage product awareness.  Marketing activities should use materials and media that reflect the racial and ethnic  composition of the targeted communities. The Bank should also have specific  advertising and outreach goals, and the results of these efforts should be documented,  monitored, and evaluated for effectiveness.  5. Upon Board approval of this Order, the Bank will provide a copy of the signed Order to  the FDIC's New York Regional Office within 30 days.  6. Upon Board approval of such Action Plan, the Bank will provide a copy of the Plan  to the FDIC’s New York Regional Office. 7. The Bank will provide the FDIC’s New York Regional Office with quarterly  updates detailing its progress in meeting the goals listed in the Action Plan."

  But in response to this, Citizens only said dismissively that the record of the acquiree doesn't matter. So they could buy OneCoin? It is major law firm making this argument. It is an embarrassment. And the Federal Reserve's question letter of October 22 does not address it, and Citizens' law firm late provided its "answer" and two responses to the Fed.

Nevertheless on March 22 the Federal Reserve Board, with Sarah Bloom Raskin blocked from joining and two others yet to arrived, rubber stamped Citizens' application. It stated that "The commenter also alleged that, as a result of disparate marketing, Investors Bank made disproportionately fewer home loans in the states of New Jersey and New York to African American individuals as compared to white individuals based on 2020 HMDA data. In addition, the commenter noted that the FDIC had imposed a condition in connection with a previous branch acquisition that Investors Bank develop an action plan to ensure that its home mortgage lending adequately addresses the credit needs of all segments of its market areas. The commenter asserted that Investors Bank has yet to meaningfully implement the required improvements and that the proposal should not be approved at this time."

The Fed gave its March 22 approval despite Investors having done very little or nothing. This as Fair Finance Watch has raised another moribund condition, by Oakwood Bank in Dallas, to the FDIC. What do these conditions mean?

Inner City Press filed a timely request for reconsideration: "This is a timely request for reconsideration of the Board's approval of the Applications by Citizens Financial Group's application to acquire Investors Bancorp noting but not addressing Investor's weakness which gave rise to FDIC condition.    This is a new low for the FRB. This was a condition imposed by one of the two other Federal bank regulators. If the Board won't even inquire into and take a written position on a merger partner's performance under a written condition imposed by another regulators, these conditions are meaningless.    Fair Finance Watch timely put into record before the Board:  The FDIC wrote: "Matthew Lee, Esquire Executive Director Inner City Press/Fair Finance Watch  Dear Mr. Lee: We are writing to inform you that the FDIC approved Investors Bank’s application to acquire eight branches from Berkshire Bank. As part of the application review process, we investigated the issues you raised in your e-mail dated January 19, 2019...  The Bank will develop and Board approve an Action Plan within 60 days of the  effective date of this Order to ensure that its home mortgage lending adequately  addresses the credit needs of all segments of its market areas. The Action Plan  should include, at a minimum, the following: a. The Bank will regularly monitor application and origination activity of home  mortgage loans in majority-minority census tracts and from Blacks throughout the  Bank’s assessment areas.  b. The Bank will ensure marketing and outreach efforts are inclusive of all communities,  including minority communities within all the Bank’s assessment areas. The  marketing and outreach efforts should focus on home mortgage product awareness.  Marketing activities should use materials and media that reflect the racial and ethnic  composition of the targeted communities. The Bank should also have specific  advertising and outreach goals, and the results of these efforts should be documented,  monitored, and evaluated for effectiveness.  5. Upon Board approval of this Order, the Bank will provide a copy of the signed Order to  the FDIC's New York Regional Office within 30 days.  6. Upon Board approval of such Action Plan, the Bank will provide a copy of the Plan  to the FDIC’s New York Regional Office. 7. The Bank will provide the FDIC’s New York Regional Office with quarterly  updates detailing its progress in meeting the goals listed in the Action Plan."      The Board in its approval merely recited this, without addressing it: "the commenter noted that the FDIC had imposed a condition in connection with a previous branch acquisition that Investors Bank develop an action plan to ensure that its home mortgage lending adequately addresses the credit needs of all segments of its market areas. The commenter asserted that Investors Bank has yet to meaningfully implement the required improvements and that the proposal should not be approved at this time."     Has Investors meaningfully implemented these requirements? The Fed with all its resources does not address it. The Order makes a mockery of the regulators' way to approve an otherwise unapprovable merger like Investors.    The Order should be reconsidered, by each current government and those incoming, before this proposal is consummated - the Order should be stayed for that purpose."

  The Fed waited until April 5 and then this boilerplate: "Your request presents matters that you raised in the application process or that were otherwise considered by the Board in acting on the proposal. Your request fails to provide additional material information related to these matters that was not already part of the record that the Board reviewed.  For the reasons discussed above and in the Order, and in light of all the facts of record, no member of the Board has requested that the Order be reconsidered or modified in any manner. Accordingly, your request for reconsideration is denied." This Fed must (be) change(d). Watch this site.

April 4, 2022

  With Sarah Bloom Raskin out of the running, who will the Administration nominate for the Federal Reserve seat? Some are talking about existing Fed personalities. But if they meant well on CRA, we would have known. Others are talking about the AFL-CIO economist, or someone (bipartisan) to represent rural America. Watch this site.

March 28,2022

Fed and Citizens Bank Thumb Noses At CRA On Investors Bank FDIC Conditions, Rubber Stamp

By Matthew Russell Lee, Patreon Story Order
 BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, March 22 – Whether or not the U.S. Community Reinvestment Act will be again enforced under the current Administration and its regulators is an open question still - though the answer is more and more No.  The proposed acquisition of Investors Bank by Citizens Bank was a litmus test, one that both Citizens and the Fed have failed.

   Investors Bank is one of the most disparate banks in New York State, where in 2020 it made only three mortgage loans to African Americans, while denying fully seven applications from African Americans. By contrast, it made 164 loans to whites while denying only 76 applications from whites.

  Inner City Press raised the 2019 disparities to the FDIC - and on July 30 was contacted by the FDIC that it imposed rare conditions on Investors. Letter here. This was raised on Citizens' applications: "be aware that based on Fair Finance Watch's comments to the FDIC about Investors, it recently imposed a condition on Investors. Investors has yet to meaningfully implement the required improvements; this application should not be approved, much less at this time.    The FDIC wrote:

 "Matthew Lee, Esquire Executive Director Inner City Press/Fair Finance Watch  Dear Mr. Lee: We are writing to inform you that the FDIC approved Investors Bank’s application to acquire eight branches from Berkshire Bank. As part of the application review process, we investigated the issues you raised in your e-mail dated January 19, 2019... The Bank will develop and Board approve an Action Plan within 60 days of the  effective date of this Order to ensure that its home mortgage lending adequately  addresses the credit needs of all segments of its market areas. The Action Plan  should include, at a minimum, the following: a. The Bank will regularly monitor application and origination activity of home  mortgage loans in majority-minority census tracts and from Blacks throughout the  Bank’s assessment areas.  b. The Bank will ensure marketing and outreach efforts are inclusive of all communities,  including minority communities within all the Bank’s assessment areas. The  marketing and outreach efforts should focus on home mortgage product awareness.  Marketing activities should use materials and media that reflect the racial and ethnic  composition of the targeted communities. The Bank should also have specific  advertising and outreach goals, and the results of these efforts should be documented,  monitored, and evaluated for effectiveness.  5. Upon Board approval of this Order, the Bank will provide a copy of the signed Order to  the FDIC's New York Regional Office within 30 days.  6. Upon Board approval of such Action Plan, the Bank will provide a copy of the Plan  to the FDIC’s New York Regional Office. 7. The Bank will provide the FDIC’s New York Regional Office with quarterly  updates detailing its progress in meeting the goals listed in the Action Plan."

  But in response to this, Citizens only said dismissively that the record of the acquiree doesn't matter. So they could buy OneCoin? It is major law firm making this argument. It is an embarrassment. And the Federal Reserve's question letter of October 22 does not address it, and Citizens' law firm late provided its "answer" and two responses to the Fed.

Nevertheless on March 22 the Federal Reserve Board, with Sarah Bloom Raskin blocked from joining and two others yet to arrived, rubber stamped Citizens' application. It stated that "The commenter also alleged that, as a result of disparate marketing, Investors Bank made disproportionately fewer home loans in the states of New Jersey and New York to African American individuals as compared to white individuals based on 2020 HMDA data. In addition, the commenter noted that the FDIC had imposed a condition in connection with a previous branch acquisition that Investors Bank develop an action plan to ensure that its home mortgage lending adequately addresses the credit needs of all segments of its market areas. The commenter asserted that Investors Bank has yet to meaningfully implement the required improvements and that the proposal should not be approved at this time."

The Fed gave its March 22 approval despite Investors having done very little or nothing. This as Fair Finance Watch has raised another moribund condition, by Oakwood Bank in Dallas, to the FDIC. What do these conditions mean? Watch this site.

March 21, 2022

After Fed Disses Community Reinvestment Act Raskin Blocked By Manchin Cook 12-12 Tie

By Matthew Russell Lee, Patreon Maxwell Book
BBC - Guardian UK - Honduras - ESPN

SDNY COURT, March 16 – When the US bank regulators and Administration say they are taking the Community Reinvestment Act more seriously, it does not appear to be true.

Case in point: the Federal Reserve Bank of New York on February 28, on Berkshire Bank which got a rare Needs to Improve CRA rating in New York State, gave out an approval on a delegated basis. The FRBNY cannot, as a matter of law and as an entity owned by private banks, deny or even condition an approval. This is a new low.

  So to the blocking of Sarah Bloom Raskin, after which this: Jay Powell advanced through the Senate Banking Committee with Elizabeth Warren opposing. Lael Brainard was backed in a 16-8 vote for the Fed vice chair, Phil Jefferson won unanimous support and Lisa Cook moved forward to the full Senate on a 12-12 tie. But will the Fed just keep rubber-stamping?

 Fair Finance Watch, with Inner City Press on the FOIA, which commented to the Fed on January 8, has immediately filed a petition for review saying it should be reviewed by each current, and all Administration-nominated Governors:

Dear Chair Powell, Secretary Misback and others in the FRS:  This is a timely petition to review the decision today by the FRBNY to approve - on a delegated basis -- the Applications of TBB Investments LLC and TBB Intermediate LLC to become bank holding companies by acquiring Berkshire Bancorp, Inc and Berkshire Bank -- which got a rare Needs to Improve CRA rating in New York.

    Significantly - and we think, disposively and requiring review by the full Board and each member, and the nominated members - Berkshire Bank received a “Needs to Improve” rating in the New York state assessment area during its May 7, 2019, CRA Performance Evaluation.  

 How could the Reserve Bank, which has no authority to deny or even condition approval on applications, deign to rubber stamp this application? This is a new low, and shows the FRS is not complying with its and the Administration's public statements about CRA and fair lending...

See also: "Reclusive landlord Moses Marx resigns as Berkshire chairman, see here. 

 FFW and Inner City Press are now even more deeply concerned about the rush by the Federal Reserve's to rubber-stamp mergers by redliners and predatory lenders. This has been killing the Community Reinvestment Act.   This bogus delegated approval must be stayed and reviewed by each Governor and nominated Governor.

 Very Truly Yours,     Matthew Lee, Esq.   Executive Director  Inner City Press/Fair Finance Watch

This was sent to the FDIC (Frank Hughes), NYSDFS, and the bank lawyers at Stoock.

  In a letter dated March 9 emailed to Inner City Press / Fair Finance Watch on March 10, Federal Reserve Board Secretary Ann E. Misback wrote, "Your petition for review was presented to the Board, and no member of the Board requested review of the Reserve Bank’s action. Accordingly, your request that the Board review the Reserve Bank’s action on the Application is denied." These Governors are: Chair Jerome H. Powell, Michelle W. Bowman, Christopher J. Waller and, yes, Lael Brainard." They say that a privately owned Federal Reserve Bank, which has not authority to disapprove any application, can approve an application by a bank with a Needs to Improve CRA rating. We'll have more on this.

It is a litmus test. Failed by these Governors.

March 14, 2022

Fed Governors Diss Community Reinvestment Act As FRBNY Approves Berkshire Bank With NTI Rating

By Matthew Russell Lee, Patreon Maxwell Book
BBC - Guardian UK - Honduras - ESPN

SDNY COURT, March 10 – When the US bank regulators and Administration say they are taking the Community Reinvestment Act more seriously, it does not appear to be true.

Case in point: the Federal Reserve Bank of New York on February 28, on Berkshire Bank which got a rare Needs to Improve CRA rating in New York State, gave out an approval on a delegated basis. The FRBNY cannot, as a matter of law and as an entity owned by private banks, deny or even condition an approval. This is a new low.

 Fair Finance Watch, with Inner City Press on the FOIA, which commented to the Fed on January 8, has immediately filed a petition for review saying it should be reviewed by each current, and all Administration-nominated Governors:

Dear Chair Powell, Secretary Misback and others in the FRS:  This is a timely petition to review the decision today by the FRBNY to approve - on a delegated basis -- the Applications of TBB Investments LLC and TBB Intermediate LLC to become bank holding companies by acquiring Berkshire Bancorp, Inc and Berkshire Bank -- which got a rare Needs to Improve CRA rating in New York.

    Significantly - and we think, disposively and requiring review by the full Board and each member, and the nominated members - Berkshire Bank received a “Needs to Improve” rating in the New York state assessment area during its May 7, 2019, CRA Performance Evaluation.  

 How could the Reserve Bank, which has no authority to deny or even condition approval on applications, deign to rubber stamp this application? This is a new low, and shows the FRS is not complying with its and the Administration's public statements about CRA and fair lending...

See also: "Reclusive landlord Moses Marx resigns as Berkshire chairman, see here. 

 FFW and Inner City Press are now even more deeply concerned about the rush by the Federal Reserve's to rubber-stamp mergers by redliners and predatory lenders. This has been killing the Community Reinvestment Act.   This bogus delegated approval must be stayed and reviewed by each Governor and nominated Governor.

 Very Truly Yours,     Matthew Lee, Esq.   Executive Director  Inner City Press/Fair Finance Watch

This was sent to the FDIC (Frank Hughes), NYSDFS, and the bank lawyers at Stoock.

  In a letter dated March 9 emailed to Inner City Press / Fair Finance Watch on March 10, Federal Reserve Board Secretary Ann E. Misback wrote, "Your petition for review was presented to the Board, and no member of the Board requested review of the Reserve Bank’s action. Accordingly, your request that the Board review the Reserve Bank’s action on the Application is denied." These Governors are: Chair Jerome H. Powell, Michelle W. Bowman, Christopher J. Waller and, yes, Lael Brainard." They say that a privately owned Federal Reserve Bank, which has not authority to disapprove any application, can approve an application by a bank with a Needs to Improve CRA rating. We'll have more on this.

It is a litmus test. Failed by these Governors.

March 7, 2022

Fed Scam on Community Reinvestment Act As FRBNY Approves Berkshire Bank With NTI Rating

By Matthew Russell Lee, Patreon Maxwell Book
BBC - Guardian UK - Honduras - ESPN

SDNY COURT, Feb 28 – When the US bank regulators and Administration say they are taking the Community Reinvestment Act more seriously, it does not appear to be true.

Case in point: the Federal Reserve Bank of New York on February 28, on Berkshire Bank which got a rare Needs to Improve CRA rating in New York State, gave out an approval on a delegated basis. The FRBNY cannot, as a matter of law and as an entity owned by private banks, deny or even condition an approval. This is a new low.

 Fair Finance Watch, with Inner City Press on the FOIA, which commented to the Fed on January 8, has immediately filed a petition for review saying it should be reviewed by each current, and all Administration-nominated Governors:

Dear Chair Powell, Secretary Misback and others in the FRS:  This is a timely petition to review the decision today by the FRBNY to approve - on a delegated basis -- the Applications of TBB Investments LLC and TBB Intermediate LLC to become bank holding companies by acquiring Berkshire Bancorp, Inc and Berkshire Bank -- which got a rare Needs to Improve CRA rating in New York.

    Significantly - and we think, disposively and requiring review by the full Board and each member, and the nominated members - Berkshire Bank received a “Needs to Improve” rating in the New York state assessment area during its May 7, 2019, CRA Performance Evaluation.  

 How could the Reserve Bank, which has no authority to deny or even condition approval on applications, deign to rubber stamp this application? This is a new low, and shows the FRS is not complying with its and the Administration's public statements about CRA and fair lending.  

As we timely noted, on January 8, Fair Finance Watch has been tracking Berkshire Bank, and has found its lending patterns troubling. Berkshire Bank in 2020 in New York State based on its disparate marketing made 335 mortgage loans to whites, with only 129 denials to whites -- while making only TWO loans to African Americans, and denying three applications from African Americans. This is outrageous.

Also: "Reclusive landlord Moses Marx resigns as Berkshire chairman, see https://www.crainsnewyork.com/commercial-real-estate/reclusive-landlord-moses-marx-resigns-berkshire-chairman  

 FFW and Inner City Press are now even more deeply concerned about the rush by the Federal Reserve's to rubber-stamp mergers by redliners and predatory lenders. This has been killing the Community Reinvestment Act.   This bogus delegated approval must be stayed and reviewed by each Governor and nominated Governor.

 Very Truly Yours,     Matthew Lee, Esq.   Executive Director  Inner City Press/Fair Finance Watch

This has also been sent to the FDIC (Frank Hughes), NYSDFS, and the bank lawyers at Stoock

It is a litmus test.

February 28, 2022

After Investors Bank Hit With Conditions, Fed Rubber Stamps Home BancShares Texas Entry

By Matthew Russell Lee, Patreon Story Order
 BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, Nov 20 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And not only the proposed acquisition of Investors Bank by Citizens Bank NA but also Home BancShares / Centennial Bank - Happy Bancshares will be litmus tests.

On November 20 Inner City Press filed with the Federal Reserve:

"This is a request for a full copy of, and a timely first comment on, the Applications of South State Corporation to merge with Home BancShares, Inc. to merge with Happy Bancshares, Inc., and thus indirectly acquire Happy State Bank. Fair Finance Watch has been tracking Home BancShares' Centennial Bank, including but not only because it has a branch in New York.

The applicant's Centennial in 2020 in Alabama based on its disparate marketing made 46 mortgage loans to whites, with 19 denials to whites -- while making only NO loans to African Americans. This is far out of keeping with the demographics, and other lenders, in Alabama - this is outrageous. This application should be denied, and a referral made to the Justice Department, as the Fed did far too late on Cadence Bank, whose lesser disparities Inner City Press similarly raised to the Fed.

This is a pattern. Centennial Bank in 2020 in Arkansas based on its disparate marketing made 1943 mortgage loans to whites, with 282 denials to whites -- while making only 113 loans to African Americans, with 37 denials. This is out of keeping with the demographics, and other lenders, in Arkansas, in the state Home BancShares' Centennial Bank presumably performs best.   South State Bank NA in 2020 in New York based on its disparate marketing made a mortgage loan to a white application, and none to African Americans. 

Centenntial Bank in 2020 in Florida based on its disparate marketing made 1591 mortgage loans to whites, with 256 denials to whites -- while making only 52 loans to African Americans, with 16 denials. This is out of keeping with the demographics, and other lenders, in Florida. What could Home BancShares' Centennial be expected to do in Texas?   

  On February 24, 2022 the Fed rubber stamped it, stating "objected to the proposal, alleging that in 2020, as a result of disparate marketing, Centennial Bank made fewer home loans in the states of Arkansas and Florida to African American individuals as compared to white individuals. The commenter also alleged that in 2020, as a result of the bank’s disparate marketing, Centennial Bank made no home loans in Alabama to African American individuals but made some loans to white individuals.27 The data cited by the commenter appears to correspond to publicly available 2020 data reported by Centennial Bank under the Home Mortgage Disclosure Act of 1975... The Board is concerned when HMDA data reflect disparities in the rates of loan applications, originations, and denials among members of different racial, ethnic, or gender groups in local areas." But not concerned enough.

February 21, 2022

In CRA Protest of Stock Yards-Commonwealth Inner City Press Filed In Oct Rubber Stamp Feb

By Matthew Russell Lee, Patreon Story Order
 BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, Feb 17 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And Stock Yards - Commonwealth has been a litmus test, one that the Fed has failed, see below. Will it also fail on CBTX - Allegiance?

  In February 2022 it was quietly reported that the Stock Yards - Commonwealth proposal was still delayed. Then the Fed, using years' old language, rubber stamped it:

"The Board received one adverse comment on the proposal. The commenter objected to the proposal, alleging that in 2020, both Stock Yards Bank and Commonwealth Bank made fewer home loans in Kentucky to African American individuals as compared to white individuals. 21 In addition, the commenter asserted that the proposal has no public benefit. Businesses of the Involved Institutions and Response to the Public Comment Stock Yards offers a variety financial products and services, including checking and savings accounts, mortgage and business loans, and asset management services, through Stock Yards Bank’s network of branches in Kentucky, Ohio, and Indiana. Through its branches in Kentucky, Commonwealth Bank offers commercial, consumer, business, and agricultural loan products; a variety of deposit products; and investment advisory and trust services. 21 The data cited by the commenter appears to correspond to publicly available 2020 data reported by Stock Yards Bank and Commonwealth Bank under the Home Mortgage Disclosure Act of 1975 (“HMDA”). 12 U.S.C. § 2801 et seq.... The Board is concerned when HMDA data reflect disparities in the rates of loan applications, originations, and denials among members of different racial, ethnic, or gender groups in local areas. These types of disparities may indicate weaknesses in the adequacy of policies and programs at an institution for meeting its obligations to extend credit fairly." The data, below, corresponded but the Fed nevertheless rubber stamped the merger, as it has in the past. What has changed?  In fact, it should have been denied as should CBTX (CommunityBank of Texas) - Alliance, on which Fair Finance Watch has also filed.

Meanwhile Stock Yards is still trying to withhold its exhibits about compliance. Inner City Press is pursuing under FOIA. Watch this site.

February 14, 2022

Federal Reserve Rubber Stamps South State Atlantic Capital Merger Despite Aug CRA Protest

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, Feb 11 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators remains an open question. On February 11, despite disparities raised in a CRA protest by Inner City Press in 2021, the Fed rubber stamped South State's merger.

The acquisition by South State of Atlantic Capital Bank in Georgia has been a litmus test. South State is so disparate that in South Carolina in 2020 for mortgage loans to African Americans it had more denials (147) than loans made (133) - while making six loans to whites for every denial to a white applicant.

On August 17, 2021 Fair Finance Watch and Inner City Press on the FOIA) filed a comment with the Federal Reserve Board, below.

 On February 11, 2022 in a Friday afternoon news dump the Fed rubber stamped the merger, stating (without name, to try to avoid judicial review) "One commenter objected to the proposal based on South State Bank’s record of home purchase lending to minority and LMI borrowers based on publicly available data reported under the Home Mortgage Disclosure Act (“HMDA”) for 2020. The commenter also alleged that South State Bank engages in disparate marketing efforts." Yeah.

February 7, 2022

Talk about dysfunction: "The Federal Reserve Board on Friday named Jerome H. Powell as Chair Pro Tempore, pending Senate confirmation to a second term as Chair of the Board of Governors. The action, effective February 5, enables him to continue to carry out his duties as Chair after the expiration of his term on the same day, and while the confirmation process is underway. In its annual organizational meeting in January, the Federal Open Market Committee separately named him as its Chair.  President Biden nominated Powell late last year for a second term as Chair of the Board of Governors. His term as a Federal Reserve Board member runs through 2028."

January 31, 2022

Inner City Press / Fair Finance Watch challenged Berkshire Bank's takeover, and the Fed has asked:

"Provide a list of organizations and community groups, if any, with which Berkshire Bank has engaged since 2020 to help reach African American borrowers in New York. In your response, please provide detailed information about the partnerships that Berkshire Bank engaged in with these organizations and community groups since 2020. 8. Provide information about Berkshire Bank’s efforts to reach African American borrowers in New York, including specialized products and marketing campaigns, since 2020 (if any). 9. Berkshire Bank received a “Needs to Improve” rating in the New York state assessment area during its May 7, 2019, CRA Performance Evaluation. Describe strategies, if any, that Berkshire Bank has implemented since 2019 to improve its performance in the New York state assessment area." Watch this site.

January 24, 2022

As the first CRA challenge of 2022, Fair Finance Watch with Inner City Press on the FOIA filed comments with the Federal Reserve against First Internet Bank, below.    On January 19, First Internet Bank wrote to say that anything for which it requested confidential treatment MUST be withheld. For First Internet Bank, Larry Tomlin of SmithAmundsen of Indianapolis tells Inner City Press and the regulators and DOJ that Fair Finance Watch should withdraw its comments. Really? Inner City Press immediately filed a new and expanded FOIA request.

From the Fed: This will acknowledge receipt of your electronic message dated January 19, 2022, and received by the Board’s Information Disclosure Section on January 20. You request, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552: the entirety of the application by First Internet Bancorp to acquire First Century Bancorp and First Century Bank, N.A., Commerce, Georgia including all portions for which the applicants have requested confidential treatment (and which they claim are thereby automatically to be withheld), and for all records including electronic records reflecting the FRS’ communications with or about First Internet or First Century or either’s affiliates since January 1, 2020.

January 17, 2022

Inner City Press and FFW challeged to the Fed the dubious Delta Investment, and now on January 14 received entirely empty of withheld echoes of secret communications:

Good day,     Attached is the public portion of the AI request and AI response in connection to the notice filed by Lucia de Campos Faria, Junia de Campos Faria Ziegelmeyer, and Eliana de Campos Faria, all of Sao Paulo, Brazil; Flavia Faria Vasconcellos, Rio de Janeiro, Brazil; The FC Family Trust, The White Dahlia Company Inc. as trustee of the FC Family Trust, both of Hampton, New Hampshire; and Claudia de Faria Carvalho, New York, New York, as primary beneficiary of the FC Family Trust (collectively, “Notificants”); to acquire voting shares of Delta Investment Company (Cayman), Georgetown, Cayman Islands, and thereby indirectly acquire voting shares of Delta National Bank and Trust Company, New York, New York.

Received:Jan 14, 2022 3:26 PM Expires:Feb 4, 2022 3:26 PM From:lisa.brannon@ny.frb.org To:innercitypress@gmail.com, lee@fairfinancewatch.org Cc:brian.steffey@ny.frb.org, nadira.hosein@ny.frb.org, karen.hsu@ny.frb.org Subject:Additional Information - Delta Investment Attachments:AI Request - Delta 12-27-2021 Nonconfidential.pdf AI Request - Delta 12-27-2021 Nonconfidential.pdf , 11-2-21 AI Response.pdf 11-2-21 AI Response.pdf , image001.gif image001.gif , image002.png image002.png , 10.12.21 AI Request email PUBLIC.pdf 10.12.21 AI Request email PUBLIC.pdf

But there are just cover letters, no actual questions or answers, it appears...This is today's Federal Reserve.

January 10, 2022

  Why do some Federal Reserve entities - FR Banks and even the governmental Board in DC - not list an email address for comments on pending merger applications. Check out these, as we will, in 2022:

Federal Reserve Bank of Chicago Colette A. Fried, Assistant Vice President, 230 South LaSalle Street, Chicago, IL 60604-1413 

Federal Reserve Bank of St. Louis Holly A. Rieser, Manager, P.O. Box 442, St. Louis, MO 63166-2034

Federal Reserve Bank of Kansas City Jeffrey Imgarten, Assistant Vice President, 1 Memorial Drive, Kansas City, MO 64198-0001 

Federal Reserve Bank of Dallas Karen Smith, Director, Applications, 2200 North Pearl Street, Dallas, TX 75201-2272 

Federal Reserve Bank of San Francisco Sebastian Astrada, Director, Applications, 101 Market Street, San Francisco, CA 94105-1579 

Board of Governors of the Federal Reserve System Ann E. Misback, Secretary, 20th & Constitution Avenue, N.W., Washington, D.C. 20551-0001

January 3, 2022

 The Fed routinely extends its time under FOIA: "This is in response to your electronic message dated November 8, 2021, and received by the Board’s Information Disclosure Section on November 9. Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request:  all withheld portions of the additional information submitted by Stock Yards Bancorp dated Nov 4 (emailed to Inner City Press on Nov 8 citing the Board’s ex parte rules) as part of its challenged application to acquire Commonwealth Bank. The response, on issues raised by the timely protest by Inner City Press and Fair Finance Watch, confines compliance information to “Confidential” Exhibits B and C, which they seek to withhold in full. This is unaccepable; all other Stock Yards requests for confidential treatment in this proceeding should be reviewed and the improperly withheld information provided to Inner City Press on an expedited basis, for comment, before any determination other than Denial is issued on Stock Yards application[.] Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until December 23, 2021, 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 December 23, 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." Yeah, the law.

December 27, 2021

The Federal Reserve waited until Jay Powell was re-appointed, and many financial journalists were already holiday minded, to dole out these approvals: 12/17/2021 Federal Reserve announces approval of application by WSFS Financial Corporation  Orders on Banking Applications  12/17/2021 Federal Reserve announces approval of application by Webster Financial Corporation  Orders on Banking Applications  12/17/2021 Federal Reserve announces approval of application by First Citizens BancShares, Inc.

Three big mergers rubber stamped in one day - a new low.

December 20, 2021:

 The Federal Reserve has hit a new low - it doesn't maintain its online H2A of pending applications subject to public comment. When one seeks to use it, sorting newest to older, the newest date has a comment period that ends before the current date. This is an outrage.

December 13, 2021

So what are the views on merger review of the candidates for the Federal Reserve's supervision seat? They include Richard Cordray who is the ex-director of the Consumer Financial Protection Bureau, Sarah Bloom Raskin, who is a former Fed Governor and deputy Treasury Secretary, and Raphael Bostic the President of the Federal Reserve Bank of Atlanta.   Other candidates for board slots include Valerie Wilson, director of the left-leaning Economic Policy Institute’s Program on Race, Ethnicity, and the Economy; Lisa Cook, a professor of economics and international relations at Michigan State University; William Spriggs, chief economist at the AFL-CIO and Karen Dynan, a former top Treasury official. Watch this cite.

December 6, 2021

Inbox from Old National to the Fed, cc-ed to Inner City Press but with major withholdings: "Please confirm whether Old National Bank (ONB) monitors branch locations in
Marion County, which is part of the Indianapolis Community Reinvestment Act
assessment area, in order to manage fair lending risk. Please also confirm whether
the bank has any plans to open new branches in majority-minority census tracts in
Marion County following the merger.
The Bank confirms that it monitors all branch locations, including those located in
Marion County, Indiana to manage fair lending risk as required and contemplated by its
applicable policies which it believes are mandated by regulation and supervisory guidance.
Please see Confidential Exhibit A for additional information." This is fraud.

November 29, 2021

As Biden Taps Jay Powell for 2d Term at Fed, CRA Protests of Home BancCorp, Citizens & South State Pend

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, Nov 22 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators remains an open question.

On November 22 the Biden Administration decided to extend the time atop of the Fed of Jay Powell. Then this: "Statement by Governor Lael Brainard:  Mr. President, I am deeply honored that you are entrusting me with this responsibility at a critical time. I am committed to putting working Americans at the center of my efforts at the Federal Reserve. This means getting inflation down." And what will Jay Powell II be?

November 22, 2021

How sleazy are some banks, and how sleaze does the Federal Reserve let them be? Inner City Press is a challenger to Webster - Sterling. The Fed asked the banks questions; the banks were supposed to send Inner City Press copy of their answer. But not only did Webster's corporate counsel withhold information about branch closing - the letter making the request to withhold that was not emailed to Inner City Press but instead sent by snail mail, to an old address Inner City Press never used in its challenge to this merger. Hide the ball...

November 15, 2021

Citizens Bank Gets Pot & Lending Qs from Fed After Investors Bank Hit With FDIC Conditions

By Matthew Russell Lee, Patreon Story Order
 BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, Nov 10 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And the proposed acquisition of Investors Bank by Citizens Bank NA is litmus test.

Investors Bank is one of the most disparate banks in New York State, where in 2020 it made only three mortgage loans to African Americans, while denying fully seven applications from African Americans. By contrast, it made 164 loans to whites while denying only 76 applications from whites.

  Inner City Press raised the 2019 disparities to the FDIC - and on July 30 was contacted by the FDIC that it imposed rare conditions on Investors. Letter here. This ha  been raised on Citizens' application, to the Fed and OCC, below.

On Nov 10, the Federal Reserve asked Citizens questions including "This correspondence relates to the application filed on behalf of Citizens Financial Group, Inc., Providence, Rhode Island (“CFG”), to acquire Investors Bancorp, Inc. (“Investors”), and thereby indirectly acquire its subsidiary bank, Investors Bank, both of Short Hills, New Jersey, pursuant to sections 3(a)(3) and 3(a)(5) of the Bank Holding Company Act of 1956, as amended. Based on staff’s review of the current record, the following additional information is requested. Please provide responses to the items in the Confidential Annex. Supporting documentation should be provided, as appropriate. Financial and Managerial  1. Discuss the extent to which CFG and Investors provide any services to marijuana- related businesses (“MRBs”). Discuss any plans contemplated at the pro forma  organization to provide services to MRBs. Discuss any policies and procedures regarding how CFG and Citizens Bank, NA would comply with relevant state laws and the guidance issued by the Financial Crimes Enforcement Network related to servicing MRB customers.1 2. Please update all financial and pro forma information presented in the application to reflect September 30, 2021 financial data.  1 See https://www.fincen.gov/resources/statutes-regulations/guidance/bsa-expectations-regarding- marijuana-related-businesses.  Competition 3. In the response to question 14 of the first additional information request (“AI request”), CFG stated that it would provide the total loan origination amount to small businesses (a business or farm with gross annual revenues of $1 million or less) in 2019 and 2020 associated with each branch CFG acquires from HSBC as soon as such information becomes available. Provide an estimated date by which CFG expects to provide this information. Legal 4. The application states that “Investors Bank also has lending offices in Danbury, Connecticut and Charlotte, North Carolina.” Confirm, if such is the case, that these offices have not been approved as branches and are not operated as branches. Additionally, confirm, if such is the case, that Investors Bank does not operate any branches in Connecticut or North Carolina." Full letter on Patreon here.

November 8, 2021

Fed Qs on Protested Webster Merger As Sterling National Bank Is Sued SDNY For China Wires

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

SOUTH BRONX / SDNY, Nov 5 – The proposed merger of Webster Financial Corp. and Sterling Bancorp has been challenged, on disparate lending and regulatory evasions, first to the Federal Reserve and  the OCC.

  On June 25, the Fed asked the banks a series of questions, below and full letter on Patreon here

  Now Inner City Press can report that on November 5, it was sent a copy of the Federal Reserve's additional letter to Webster and its (ex-Fed) outside counsel: "November 5, 2021 Dear Ms. Patricia A. Robinson, This letter refers to the application filed by Webster Financial Corporation, Waterbury, Connecticut (“Webster”), for the prior approval of the Board of Governors of the Federal  Reserve System (the “Board”), to acquire Sterling Bancorp (“Sterling”), and thereby indirectly  acquire Sterling National Bank. Based on staff’s review of the current record, the following additional information is requested.  Please provide your responses to the items listed below. Supporting documentation should be  provided as appropriate.

1. You have indicated that Sterling Bank and Webster Bank do not have any current plans  to consolidate, relocate or close any branches before consummation of, or otherwise  unrelated to, the proposed transaction. Confirm if that is still the case and confirm that  any anticipated branch closures, consolidations, or relocations that may occur following  the merger will be conducted in a manner consistent with Webster Bank’s branch closing  policies and procedures and the branch closing requirements contained in section 42 of  the Federal Deposit Insurance Act (12 U.S.C. § 1831r-1). If not, discuss why not. Your  response should include a copy of any applicable policies and procedures, to the extent  not already provided.

2. Provide an updated version of the application’s Confidential Exhibit C ‘Balance Sheets,  Income Statements, Regulatory Capital and Asset Quality’. The statements and  information provided should be as of September 30, 2021. Please provide your written response and supporting documentation via E-Apps to Michael Sumrell at the Federal Reserve Bank of Boston. In addition, in accordance with the  Federal Reserve’s ex parte procedures, provide a copy of the public portion of your response  (together with any attachments) directly to the commenter.
 cc: Inner City Press/Fair Finance Watch"

November 1, 2021

NY Federal Reserve Makes Settlement Secret After It Fired Ex FBI Agent Sama 69 Years Old

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Oct 28 – Robert N. Sama, 69, was terminated by the Federal Reserve Bank of New York on February 19, 2020. He had worked there since 2007.

He filed a lawsuit in the U.S. District Court for the Southern District of New York on December 10, 2020 - Inner City Press reported it that same day.   And now on October 27, 2021, the move to settle with no transparency, see below.

From the complaint we learn that "each FRS Bank maintains an on-site law enforcement commad called a Law Enforcement Unit."

 Sama was Vice President of the FRBNY's LEU. He had previously been with the FBI for 29 years.  

After Sama's "escorted ejection," his job was given to LEU Captain Ronald Porter, who was "jumped three level" to handle Sama's LEU responsibilities. Here is Sama in a Fed report, as Vice President, Federal Reserve Law Enforcement. Law, indeed.

His complaint has been  assigned to SDNY Judge Valerie E. Caproni, and Magistrate Stewart D. Aaron.

On February 9, the FRBNY filed an answer via an outside law firm, arguing among other things that the SDNY "lacks subject matter jurisdiction," that Sama "failed to mitigate his alleged damages" and that State and City claims are "preempted by federal law."

 Similarly, the Federal Reserve says that the FRBNY and other Reserve Banks are not subject to FOIA. Why then can they approve bank mergers? Inner City Press has FOIA requests pending.

On October 27, amid a scandal about conflicted stock trading by Federal Reserve Bank presidents and others, the FRBNY's outside counsel filed a letter to Judge Caproni that "the parties have reach an agreement to settle this matter and are in the process of finalizing the settlement agreement."

And on October 28, it was nailed down: "ORDER: WHEREAS on October 27, 2021 (Dkt. 28), the parties notified the Court that they have reached an agreement in principle resolving all issues; IT IS HEREBY ORDERED THAT all previously scheduled conferences and other deadlines are CANCELLED. IT IS FURTHER ORDERED that this case is DISMISSED with prejudice and without costs (including attorneys fees) to either party. The Clerk of Court is respectfully directed to terminate all open motions and to CLOSE the case. Within 30 days of this order, the parties may apply to reopen this case. Any such application must show good cause for holding the case open in light of the parties settlement and must be filed within 30 days. Any request filed after 30 days or without a showing of good cause may be denied solely on that basis. Additionally, if the parties wish for the Court to retain jurisdiction to enforce their settlement agreement, they must submit within the same 30-day period: (1) their settlement agreement to the Court in accordance with Rule 6.A of the Courts Individual Practices and (2) a request that the Court issue an order expressly retaining jurisdiction to enforce the settlement agreement. See Hendrickson v. United States, 791 F.3d 354 (2d Cir. 2015). SO ORDERED. (Signed by Judge Valerie E. Caproni on 10/28/2021)."  But what are the terms of the settlement? If company are pushed to disclose this, how much more so the Fed? Uh, Congress?

The case is Sama v. Federal Reserve Bank of New York, 20-cv-10450 (Caproni)

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October 25, 2021

Horse already out of the barn: "Reserve Bank presidents now will be required to publicly disclose financial transactions within 30 days, as Board Members and senior staff currently do.  The Board and the Reserve Banks will incorporate these new restrictions into the appropriate Federal Reserve rules and policies over the coming months."

October 18, 2021

despite an October 2 request, only on October 15 did the Fed provide the "public portion" of the Stock Yards - Commonwealth application, and even then with portions inappropriately withheld at Stock Yards' request. This is a litmus test that is being failed.

October 11, 2021

For this time Oct 7, 2022, S&P Global, "Politics likely at play in First Citizens, CIT deal delay," by Lauren Seay, "Matthew Lee, executive director of Inner City Press said: "at the Fed under Chair Jay Powell CRA is not given the weight that it should be, so I don't think it's the reason here." The delay may also be an attempt by Powell to "seem more serious on merger review. They send a message if they want to send one by delaying. But what's the point of a message if nobody knows? The ball is in their court to say why," Lee said. here

October 4, 2021

Amid Protest to Fed of Citizens Bid for Investors Bank 2 Reserve Bank Presidents Out 4 Investing

By Matthew Russell Lee, Patreon Story Order
 BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, Sept 29 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators, particularly the Federal Reserve which already in essence runs the OCC and has its chair position in competition, is an open question.

And now, after reports of trading improprieties that remain unaddressed by the Governors including Chair Jay Powell, Robert Kaplan, president of the Federal Reserve Bank of Dallas, has resigned, immediately after - and with slightly more transparency than - the Boston Fed's Rosengren. That's not saying much.


  And the proposed acquisition of Investors Bank by Citizens Financial will be litmus test.

September 27, 2021

After CRA Protest of South State's Atlantic Capital Bid Fed Asks Questions & Gives 8 Days

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, Sept 23 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question.

Now the proposed acquisition by South State of Atlantic Capital Bank in Georgia will be a litmus test. South State is so disparate that in South Carolina in 2020 for mortgage loans to African Americans it had more denials (147) than loans made (133) - while making six loans to whites for every denial to a white applicant.

On August 17, Fair Finance Watch and Inner City Press on the FOIA) filed a comment with the Federal Reserve Board, below.

On September 4, Fair Finance Watch commented to the Office of the Comptroller Currency, which some say has changed for the better. We'll see - now on September 7, South State has written to Fair Finance Watch, cc-ing the OCC and Fed: "Dear Mr. Lee... In the matter regarding the concerns of the Bank’s disparate marketing, the Bank is committed to providing equal access to credit throughout our footprint. The Bank takes a multi-layered approach to ensure that marketing of credit products reach all communities within the Bank’s Assessment Area and each application is underwritten without consideration of a prohibited basis. The Bank has undergone reviews by independent audit firms with reports dated June 30, 2020 and June 30, 2019 where marketing efforts have been reviewed. The reviews did not yield any fair lending concerns."

Then something is very wrong with those audits.

The Fed briefly extended the comment period - but then on September 23 asked this of South State: "This correspondence relates to the application filed by South State Corporation, Winter Haven, Florida (“South State”), parent of South State Bank, National Association (“South State Bank”), to merge with Atlantic Capital Bancshares, Inc. (“Atlantic Capital”), and thereby acquire its subsidiary, Atlantic Capital Bank, National Association (“Atlantic Capital Bank”), both of Atlanta, Georgia, pursuant to sections 3(a)(3) and 3(a)(5) of the Bank Holding Company Act of 1956, as amended (“BHC Act Application”). Please respond in full to the following additional information items, including those listed in the confidential annex, and provide supporting documentation as appropriate.  ASSET QUALITY 1. Provide the following classified asset information, as of June 30, 2021, for South State Bank, Atlantic Capital Bank, and the pro forma institution. a. The amount of internally classified assets, comprised of the separate categories of substandard, doubtful, and loss, with relevant components of other real estate owned separately identified in each category. b. Detail for the calculation of the classified assets ratio, including the level of classified assets compared to the total amount of tier 1 capital and allowance for loan loss reserves.  INTEGRATION RISK 2. Given South State’s significant and recent merger with CenterState Bank Corporation in June 2020, describe the status of integration of the two companies, including whether South State’s key resources have the bandwidth to successfully execute and integrate the proposed merger with Atlantic Capital.  OTHER INFORMATION 3. Clarify whether Atlantic Capital has elected to be treated as a financial holding company under the Bank Holding Company Act of 1956, as amended. Section 3.1 of the Agreement and Plan of Merger between South State Corporation and Atlantic Capital Bancshares, Inc. indicates that Atlantic Capital has not made this election, while the response to question 1 of the Form FR Y-3 indicates that Atlantic Capital is “a designated financial holding company.” 4. Provide the following: a. Pro forma organizational charts of South State, including South State Bank, following consummation. b. Update on the status of all other agency filings. c. Copy of the Form S-4 filed with the Securities and Exchange Commission in connection with the proposed transaction.  Request for Additional Information South State Corporation September 23, 2021  Page 2 of 2  Please address your response to Mr. Erien O. Terry and submit within eight business days." But that's after the close of the ("extended") comment period...

As to the Fed, which denies FOIA requests after five months, here, on August 25, this strange response: "Dear Mr. Lee,     This is to acknowledge receipt of your email to the Office of the Secretary for the Board of Governors of the Federal Reserve System (Board) dated August 17, 2021, regarding the proposal of South State Corporation to merge with Atlantic Capital Bancshares, Inc., and thereby indirectly acquire Atlantic Capital Bank, NA.  To date, South State Corporation has not filed an application with the Federal Reserve System.  Currently, the public comment period for the proposal will end on September 20, 2021. 

   If an application is filed within the next three months from the date your comment was sent, your correspondence will be made part of the record, and the Board will evaluate your comment.  We will also send a copy of the public portions of the application as soon as possible after the application is received.     Sincerely,     Jennifer Snow  Senior Examiner  Supervision, Regulation, and Credit  Federal Reserve Bank of Atlanta     Integrity. Excellence. Respect."

How can there be a comment period with expiration date, if there is no application? Inner City Press asked, and on August 26 is told:

"Our procedures provide that advance notice in the Federal Register may be requested in advance of a filing. The comment period end date applies to the Federal Register notice, which was filed in advance of the application being filed."

   What - the comment period running to its conclusion, before any application to comment on is available? This seems far too bank-friendly. How does it relate to the administration's Antitrust Memo? Watch this site.

September 20, 2021

Talk about a scam: "By electronic message dated March 10, 2021, and received by IDS on March 11,
you submitted a request seeking:

all records in the possession or control of the FRS, from the past three
years, regarding Wirecard, including but not reference to the bank’s
collapse’s implications for the FRS’ view of German bank regulation
under FBSEA [and] all records the FRS has, in the past three years,
regarding [Gilbert] Armenta, Ruja Ignatova, Mark Scott and/or
OneCoin, and also regarding marijuana banking, central to the case(s).
On August 31, 2021, the Deputy Secretary denied your request for
information. You subsequently appealed that decision and requested expedited
processing of your appeal.1
Pursuant to the Board’s Rules Regarding Availability of Information
(“Board’s Rules”), as a member of the news media you are required to
demonstrate that there is “[a]n urgency to inform the public about an actual or
alleged Federal Government activity[.]”2

In support of your request forexpedited treatment, you allege that “[t]hese are serious criminal issues, and the
Fed would explanation took five months on the initial request, to provide not a
single document[.]” However, you have not set forth facts demonstrating an
urgent need to inform the public of Board activity. Rather, you provided only a
conclusory statement that you believe there are “serious criminal issues.”
Moreover, neither the amount of time the Board took to respond to your initial
request, nor the volume of information provided in response to your request,
has any bearing on whether the records you requested are urgently needed.
Thus, I have determined that your request does not comply with the criteria for
expedited processing because you have not set forth facts demonstrating an
urgency to inform the public concerning actual or alleged Board activity.3
Your request for expedited processing, therefore, is denied without prejudice to
your filing a new request providing additional information that meets the requirements of
the Board’s Rules for expedited processing. Accordingly, your appeal is being processed
under the Board’s normal FOIA procedures."

September 13, 2021

FOIA request acknowledged - but still no records: "Your request has been assigned number APP-2021-00016. Please reference this number in all future correspondence.    Request description:  This is a FOIA appeal of the Deputy Secretary's August 31, 2021 denial in full of my and Inner City Press' March 10, 2021 FOIA request for  "all records in the possession or control of the FRS, from the past three years, regarding Wirecard, including but not reference to the bank’s collapse’s implications for the FRS’ view of German bank regulation under FBSEA [and] all records the FRS has, in the past three years, regarding [Gilbert] Armenta, Ruja Ignatova, Mark Scott and/or OneCoin, and also regarding marijuana banking, central to the case(s)"

September 6, 2021

Federal Reserve on OneCoin & Wirecard FOIA Takes 5 Month to Deny, Inner City Press Appeal

By Matthew Russell Lee, Patreon FOIA Denial
BBC - Guardian UK - Honduras - ESPN

SDNY COURT / BRONX, Sept 4 –    The Federal Reserve took five months to act on Inner City Press' Freedom of Information Act request about OneCoin, Wirecard and marijuana banking - and that provided no documents at all.  Denial on DocumentCloud here.

In response to Inner City Press' March 2021 FOIA request, the Fed on August 31 wrote:

"This is in reference to your email message dated March 10, 2021 and received by  the Board’s Information Disclosure Section on March 11. In your email, you note that  “Inner City Press has been covering the US v. Weigand bank fraud trial in the SDNY[.]”  In light of this coverage, and pursuant to the Freedom of Information Act (“FOIA”), 5  U.S.C. § 552, you request: all records in the possession or control of the FRS, from the past three  years, regarding Wirecard, including but not reference to the bank’s  collapse’s implications for the FRS’ view of German bank regulation  under FBSEA [and] all records the FRS has, in the past three years,  regarding [Gilbert] Armenta, Ruja Ignatova, Mark Scott and/or  OneCoin, and also regarding marijuana banking, central to the case(s).

With respect to the part of your request seeking the past three years’ worth of  records regarding Wirecard, staff searched Board records but did not locate any  information related to implications of “the bank’s collapse” or the Weigand case you  reference in your request.1   With respect to the part of your request seeking all records “regarding [Gilbert]  Armenta, Ruja Ignatova, Mark Scott and/or OneCoin” for the past three years, staff  searched Board records and located one responsive document.

 I have determined,  however, that the responsive information constitutes confidential supervisory information  (e.g., a supervisory report). This information is subject to withholding and will be withheld pursuant to exemption 8 of the FOIA, 5 U.S.C. § 552(b)(8).    

  Inner City Press has appealed:

"This is a FOIA appeal of the Deputy Secretary's August 31, 2021 denial in full of my and Inner City Press' March 10, 2021 FOIA request for 

'all records in the possession or control of the FRS, from the past three years, regarding Wirecard, including but not reference to the bank’s collapse’s implications for the FRS’ view of German bank regulation under FBSEA [and] all records the FRS has, in the past three years, regarding [Gilbert] Armenta, Ruja Ignatova, Mark Scott and/or OneCoin, and also regarding marijuana banking, central to the case(s)"    After taking more than five months, the Federal Reserve says it has no records about Wirecard, and only one about OneCoin, which it withholds in full. This is an appeal - and a request for how the Fed can justify taking five months to provide no documents at all.    As to Wirecard, the request is not as circumscribed as the response makes it appear. Given the payments issues raised by the Wirecard collapse, Inner City Press finds it hard to believe that the Fed has no records concerning it. And since the Federal Reserve did not and does not regulate or supervised OneCoin, Inner City Press contests the invocation of the bank supervision exemption to withhold this record in full. Particular given statements on cryptocurrency from Federal Reserve officials, for example the present of the Minneapolis Federal Reserve, that the entire Federal Reserve System claims to have a single document about OneCoin is not credible.   As to marijuana banking, to refuse to provide any documents is unacceptable. Given the legal issues of this substance being illegal federally but legal in several states, it is impossible to believe that the Fed has not provided guidance to banks on the topic. Those records are responsive, particularly after five months."

Watch this site.

August 30, 2021

CRA Protest to South State-Atlantic Capital, Fed Begins Closing Comments Before Application

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, August 26 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question.

Now the proposed acquisition by South State Corporation of Atlantic Capital Bank in Georgia will be a litmus test. South State is so disparate that in South Carolina in 2020 for mortgage loans to African Americans it had more denials (147) than loans made (133) - while making six loans to whites for every denial to a white applicant.

On August 17, Fair Finance Watch and Inner City Press on the FOIA) filed a comment with the Federal Reserve Board, below.

On August 25, this strange response: "Dear Mr. Lee,     This is to acknowledge receipt of your email to the Office of the Secretary for the Board of Governors of the Federal Reserve System (Board) dated August 17, 2021, regarding the proposal of South State Corporation to merge with Atlantic Capital Bancshares, Inc., and thereby indirectly acquire Atlantic Capital Bank, NA.  To date, South State Corporation has not filed an application with the Federal Reserve System.  Currently, the public comment period for the proposal will end on September 20, 2021. 

   If an application is filed within the next three months from the date your comment was sent, your correspondence will be made part of the record, and the Board will evaluate your comment.  We will also send a copy of the public portions of the application as soon as possible after the application is received.     Sincerely,     Jennifer Snow  Senior Examiner  Supervision, Regulation, and Credit  Federal Reserve Bank of Atlanta     Integrity. Excellence. Respect."

How can there be a comment period with expiration date, if there is no application? Inner City Press asked, and on August 26 is told:

"Our procedures provide that advance notice in the Federal Register may be requested in advance of a filing. The comment period end date applies to the Federal Register notice, which was filed in advance of the application being filed."

   What - the comment period running to its conclusion, before any application to comment on is available? This seems far too bank-friendly. How does it relate to the administration's Antitrust Memo? Watch this site.

August 23, 2021

So: “I was more optimistic about crypto and bitcoin five or six years ago,” Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said Aug 17, 2021.  “So far what I’ve seen is … 95% fraud, hype, noise and confusion.”

August 16, 2021

Old National - 1st Midwest Was CRA Protested Now Gets Asked About Multi-State Lending

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, August 11 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And the proposed merger of two redlining banks, M&T and People's United, will be a litmus test, see below.

And this one: Old National's proposal to buy First Midwest. On June 28, Fair Finance Watch and Inner City Press on the FOIA) filed the below with the Fed.

And on July 21-22, these Federal Reserve questions to Old National's outside counsel at Patton Boggs below. But the next day, the Fed told Patton Bogg it was denying Fair Finance Watch's request to keep the comment period open, even while the Fed has yet to provide FOIA documents despite ostensibly granting expedited treatment to Inner City Press' request.

Now on August 11, the Fed has belatedly asked Old National about its lending record, including "This correspondence relates to the application submitted by Old National Bancorp, Evansville, Indiana, to acquire through merger First Midwest Bancorp, and its subsidiary, First Midwest Bank, both of Chicago, Illinois, pursuant to section 3 of the Bank Holding Company Act of 1956 and Section 225.15 of Regulation Y of the Board of Governors of the Federal Reserve System (“Board”). Based on staff’s review of the current record, the following additional information is requested. Supporting documentation, as appropriate, should be provided. 1. Please provide a list of organizations and community groups, if any, with which Old National Bank engaged since 2017 to help reach minority borrowers, including African American borrowers, in Minneapolis, MN, Indianapolis, IN, Grand Rapids, MI, Ann Arbor, MI, and Louisville, KY. In your response, please provide detailed information about the partnerships that Old National Bank engaged in with these organizations and community groups since 2017. 2. Please provide information about Old National Bank’s efforts to reach African American and other minority borrowers in the Minneapolis, MN, Indianapolis, IN, Grand Rapids, MI, Ann Arbor, MI, and Louisville, KY markets, including specialized products and marketing campaigns, since 2017. 3. Please identify the organizations and community groups, if any, with which Old National Bank has engaged since the last Community Reinvestment Act (“CRA”) examination to help reach low- and moderate-income (“LMI”) borrowers and geographies in the Grand Rapids, MI and Ann Arbor, MI markets. 4. Please provide further information about Old National Bank’s efforts to reach LMI borrowers and geographies in the Grand Rapids, MI and Ann Arbor, MI markets, including specialized products and marketing campaigns, since the last CRA examination.  Ms. Katie Wechsler August 11, 2021 Page 2  5. Please identify the organizations and community groups, if any, with which Old National Bank has engaged since the last CRA examination to help reach small businesses located in LMI geographies, and small businesses generally, in the Minneapolis, MN, Ann Arbor, MI, and Louisville, KY markets. 6. Please provide further information about Old National Bank’s efforts to reach small businesses located in LMI geographies, and small businesses generally, in the Minneapolis, MN, Ann Arbor, MI, and Louisville, KY markets, including specialized products and marketing campaigns, since the last CRA examination. 7. Please describe Old National Bank’s efforts to improve CRA performance under the Investment Test in Illinois since the last CRA examination. In your response, please provide detailed information about the bank’s level of qualified investments in the bank’s Illinois assessment areas. Please submit your response to the Federal Reserve Bank of St. Louis within eight business days." Watch this site.

August 9, 2021

Old National - 1st Midwest Was CRA Protested Now Withholds All Answers So New FOIA

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, August 4 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And the proposed merger of two redlining banks, M&T and People's United, will be a litmus test, see below.

And this one: Old National's proposal to buy First Midwest. On June 28, Fair Finance Watch and Inner City Press on the FOIA) filed the below with the Fed.

And on July 21-22, these Federal Reserve questions to Old National's outside counsel at Patton Boggs below. But the next day, the Fed told Patton Bogg it was denying Fair Finance Watch's request to keep the comment period open, even while the Fed has yet to provide FOIA documents despite ostensibly granting expedited treatment to Inner City Press' request.

 And now Old National has tried to withhold all of its CRA responses, triggering this FOIA request: " This is a FOIA request for the all withheld portions of the additional information submitted by Old National on August 2 as part of its challenged application seeking to aquire First Midwest including but not limited to the all of the withheld convenience and needs answers: "Clarify whether a decision will be made prior to consummation on which branches will be closed or consolidated as a result of the merger. b. Provide information about how branches will be evaluated when determining whether branches will be closed or consolidated as a result of the merger. c. Discuss how the impact of any branch closures in low- and middle-income and/or majority-minority communities will be mitigated.   (c) Please see Confidential Exhibit E for the requested information. 9. Describe which components of First Midwest Bank’s and Old National Bank’s consumer compliance programs will be adopted into the Resultant Bank’s consumer compliance program. Please see Confidential Exhibit F for the requested information. 10. Provide information on the Resultant Bank’s processes and procedures in the event that products are discontinued for existing customers and existing customers are transitioned into new products as a result of the merger. Please see Confidential Exhibit G for the requested information."  This is an outrage.  This follows up on our previous and still outstanding FOIA request for the withheld portions fo the Application and the Fed's communications with and about the applicants."

This is a pro-corporate circus, that should be exposed under the new Antitrust Executive Order.

August 2, 2021

Governor Brainard, July 30: "Although the EPOP ratio for Black individuals has improved more strongly than the overall ratio over the course of 2021, closing about 40 percent of the December gap, it remains more than 3 percentage points below its pre-pandemic level and more than 2 percentage points below the current level of the EPOP ratio for white individuals."

July 26, 2021

Old National - 1st Midwest Was CRA Protested Now Fed Delays on FOIA But Closes Ears

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, July 23 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And the proposed merger of two redlining banks, M&T and People's United, will be a litmus test, see below.

And this one: Old National's proposal to buy First Midwest. On June 28, Fair Finance Watch and Inner City Press on the FOIA) filed the below with the Fed.

Andon July 21-22, these Federal Reserve questions to Old National's outside counsel at Patton Boggs below. But the next day, the Fed told Patton Bogg it was denying Fair Finance Watch's request to keep the comment period open, even while the Fed has yet to provide FOIA documents despite ostensibly granting expedited treatment to Inner City Press' request. This is a pro-corporate circus, that should be exposed under the new Antitrust Executive Order.

The Fed's questions: "July 21, 2021  Ms. Katie Wechsler Of Counsel Squire Patton Boggs (US) LLP 2550 M Street, NW Washington, DC 20037 Dear Ms. Wechsler: This correspondence relates to the application submitted by Old National Bancorp (Old National), Evansville, Indiana, to acquire through merger First Midwest Bancorp (First Midwest), and its subsidiary, First Midwest Bank, both of Chicago, Illinois, pursuant to section 3 of the Bank Holding Company Act of 1956 and Section 225.15 of Regulation Y of the Board of Governors of the Federal Reserve System (Board). Based on staff’s review of the current record, the following additional information, including the information in the Confidential Attachment, is requested. Supporting documentation, as appropriate, should be provided. Financial and Managerial 1. Provide pro forma financial statements and capital ratios as of June 30, 2021 for Old National and Old National Bank, as soon as available. 2. Provide the employment agreement for Michael Scudder. 3. Provide an update, if any, on the status of other required regulatory approvals for the proposed transaction, including state approvals. 4. Confirm the anticipated closing date of the merger. Confirm whether the bank merger and the holding company merger will occur on the same date. Legal 5. In response to Question 16 of the FR Y-3 application dated June 18, 2021 (“the Application”), you state that First Midwest Bank has five active wholly-owned operating subsidiaries. The list of five subsidiaries includes “First Midwest Holdings, Inc.” twice, and indicates that First Midwest Holdings, Inc. has a wholly-owned subsidiary, FMB Investments Ltd.  a. Confirm the number of active wholly-owned operating subsidiaries held either directly or indirectly by First Midwest Bank. If any of these subsidiaries were not listed in response to Question 16, identify them and provide brief descriptions of their respective activities.  b. Confirm whether First Midwest Securities Management, LLC is a wholly- owned operating subsidiary of First Midwest Bank. If so, provide a brief  description of its activities.  6. As referenced in the Agreement and Plan of Merger dated May 30, 2021, provide the First Midwest Disclosure Schedule and Old National Disclosure Schedule. 7. The response to Question 21(d) of the Application does not indicate whether any state community reinvestment laws apply to Old National. 12 U.S.C. § 1842(d)(3)(B) requires the Board to consider an applicant’s record of compliance with applicable state community reinvestment laws. Confirm that the Old National organization (i.e., Old National and its subsidiaries) is not subject to a state community reinvestment law in any jurisdiction in which it operates. If the Old National organization is subject to a state community reinvestment law, discuss the Old National organization’s record of compliance with the applicable state law(s). Convenience and Needs and Consumer Compliance 8. Page 4 of the Application states that the “Resultant Bank” will continue to maintain all the current branches of both Old National Bank and First Midwest Bank; however, the response to Question 20(c) also states, “As of this date, no final decision has been made with respect to branch closing or consolidations.” a. Clarify whether a decision will be made prior to consummation on which branches will be closed or consolidated as a result of the merger. b. Provide information about how branches will be evaluated when determining whether branches will be closed or consolidated as a result of the merger. c. Discuss how the impact of any branch closures in low- and middle-income and/or majority-minority communities will be mitigated.  9. Describe which components of First Midwest Bank’s and Old National Bank’s consumer compliance programs will be adopted into the Resultant Bank’s consumer compliance program. 

 10. Provide information on the Resultant Bank’s processes and procedures in the event that products are discontinued for existing customers and existing customers are transitioned into new products as a result of the merger. 11. Confirm whether the Resultant Bank plans to expand its Community Reinvestment Act assessment areas after the merger beyond the existing assessment areas of both Old National Bank and First Midwest Bank. Please submit your response to the Federal Reserve Bank of St. Louis within eight business days. In accordance with the Board’s procedures regarding ex parte communications, provide a copy of the public portion of your response (together with any attachments) directly to the commenter."

July 12, 2021

How will the Federal Reserve deal with this, from the antirust Executive Order? " (e)  To ensure Americans have choices among financial institutions and to guard against excessive market power, the Attorney General, in consultation with the Chairman of the Board of Governors of the Federal Reserve System, the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation, and the Comptroller of the Currency, is encouraged to review current practices and adopt a plan, not later than 180 days after the date of this order, for the revitalization of merger oversight under the Bank Merger Act and the Bank Holding Company Act of 1956 (Public Law 84-511, 70 Stat. 133, 12 U.S.C. 1841 et seq.) that is in accordance with the factors enumerated in 12 U.S.C. 1828(c) and 1842(c)."

July 5, 2021

Still no docs: "This will acknowledge receipt of your electronic submission dated June 28, 2021, and received by the Board’s Information Disclosure Section on June 29. You request, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552: the entirety of the application by Old National Bancorp, Evansville, Indiana; to merge with First Midwest Bancorp, Inc., and thereby indirectly acquire First Midwest Bank, including all portions for which the applicants have requested confidential treatment, and for all records including electronic records reflecting the FRS’ communications with or about Old National or First Midwest or either’s affiliates since January 1, 2020. The Board makes every effort to fulfill requests in a timely manner; however, there may be delays in fulfilling complex requests or those that require consultation

June 28, 2021

Webster On Sterling Merger Protest Told By Fed To Respond, and to 12 Questions, Here

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

SOUTH BRONX / SDNY, June 26 – The proposed merger of Webster Financial Corp. and Sterling Bancorp has now been challenged, on disparate lending and regulatory evasions, first to the Federal Reserve and  the OCC.

  On June 25, the Fed asked the banks a series of questions, below and full letter on Patreon here

  Fair Finance Watch has found that in 2019 in its home state of Connecticut, Webster National Bank made 3147 mortgage loans to whites, with 1364 denial to whites - while making only 71 loans to African Americans with fully 99 denials to African American. This is significantly worse than other banks in the state; the merger must be denied.

The Fed on June 25 wrote, copying Fair Finance Watch: "The application references a new mobile banking platform being developed by Sterling Bank  that will be adopted by the combined organization.  a. Describe any due diligence conducted by Webster Bank regarding the new mobile  banking platform and the extent to which the development is taking place in-house or  via a third party. 

b. Describe in greater detail the intended uses of the mobile banking platform and the  data collected therefrom, the specific features and products that will be offered by the  platform, and the ability of customers to opt in or out of its use, and to limit the data  that will be collected through the platform.  c. To the extent not already addressed in your responses to the previous questions,  discuss efforts to ensure that the mobile banking platform will be offered in  compliance with consumer protection laws, including fair lending laws. Your  discussion should include (i) the extent to which technology-based data that is alternative to data traditionally used in credit decisions would be used to underwrite  loans offered through the platform, (ii) any anticipated efforts to ensure such  alternative data is used in compliance with fair lending laws, and (iii) how proprietary  customer information would be safeguarded.  d. To the extent not already addressed in your responses to the previous questions,  describe any anticipated changes to the Community Reinvestment Act (“CRA”) plans  for the combined institution that would result from the implementation of the mobile  banking platform.

 2. The application states that “Webster Bank and Sterling Bank are carefully evaluating their  current consumer products and community development programs and services so that the  combined bank may incorporate the strongest components of both banks’ community  reinvestment activities.”  a. Provide an update on this review process including, if it is not yet complete, an  anticipated timeframe for completion.   . As this information becomes available, discuss whether any consumer products or  community development programs and services of either bank are expected to be  discontinued and whether, to the extent not already described in the application, any  products, programs or services will be made available in either bank’s market that are  not currently offered.  3. Page 36 of the application indicates that Webster Bank made more than 11,000 PPP loans.  Pages 37 and 73 of the application indicate that Webster Bank funded more than 18,000 PPP  loans totaling more than $2.0 billion. Page 57 of the application indicates that Webster Bank  has participated in funding nearly $1.98 billion in PPP loans to over 17,350 customers.  Confirm the latest figures for number and dollar volume of PPP loans.

 4. Respond to the public comment opposing the transaction, submitted June 3, 2021. Among  other things, the public comment generally criticizes Webster Bank’s fair lending  performance. The commenter also asserts that the CRA data of Sterling Bank is unreliable.  5. Provide pro forma asset and liability concentrations for Webster Bank as of March 31, 2021.  (Indicate if such analysis would be substantially similar for Webster at the consolidated  level). Pro forma asset or credit concentrations should be compared to pro forma tier 1  capital plus allowance for loan and lease losses for Webster Bank as of March 31, 2021. a. Provide further breakdown of pro forma concentrations by portfolio (retail,  commercial, and related subsectors) and by industry category (retail, restaurant,  hotels, office, etc.).  b. Discuss key processes that are currently employed and/or whether any enhancements  are needed to effectively monitor and manage asset or credit concentrations following  the proposed bank merger. This may include any de-risking initiatives or  recalibration of lending thresholds or risk tolerance limits.  c. Provide a pro forma asset composition mix for Webster Bank and discuss any  meaningful change relative to the bank’s actual balance sheet, with both profiles  (pro forma and actual) as of March 31, 2021.  Please provide your written response and supporting documentation via E-Apps to  Michael Sumrell at the Federal Reserve Bank of Boston. In addition, in accordance with the  Federal Reserve’s ex parte procedures, provide a copy of the public portion of your response  (together with any attachments) directly to the commenter." Watch this site.

June 21, 2021

Now the Fed has issued a procedural ruling on Inner City Press' Webster - Sterling FOIA request - but still not documents: "This is in response to your electronic submission dated June 3, 2021, and received by the Board’s Information Disclosure Section on June 4. Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request:  the entirety of the application by Webster Financial Corporation to merge with Sterling Bancorp, and thereby indirectly acquire Sterling National Bank, including all portions for which the applicants have requested confidential treatment, and for all records including electronic records reflecting the FRS’ communications with or about Webster or Sterling or either’s affiliates since January 1, 2020. You also seek expedited processing for your request because “the records [should be] provided before the comment period ends (for now, July 8).” The Board’s Rules Regarding Availability of Information and the FOIA provide that a requester seeking expedited processing should demonstrate a compelling need for the records, and that this need may be evidenced by a statement that the requester is “a person who is primarily engaged in disseminating information” and there is “[a]n urgency to inform the public about an actual or alleged Federal Government activity.” See 12 C.F.R. § 261.12(c); see also 5 U.S.C. § 552(a)(6)(E)(v)(II). I have determined to grant your request for expedited processing"

June 14, 2021

It took the Fed a full week to acknowledge Inner City Press / Fair Finance Watch's comments on Webster - Sterling and send even the "public" portion of the application -- still, as of June 12, no substantive response to the FOIA request...

Greetings Mr. Lee,     We acknowledge receipt of your email correspondence dated June 3, 2021 to this Reserve Bank commenting on the proposed merger between Webster Financial Corporation, Waterbury, Connecticut, and Sterling Bancorp, Pearl River, New York.  Please see attached this Reserve Bank’s acknowledgement letter.

June 7, 2021

From the Fed, no mention if whether they will respond as they should during the comment period:

Dear Mr. Lee:
This will acknowledge receipt of your electronic submission dated June 3, 2021,
and received by the Board’s Information Disclosure Section on June 4. You request,
pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552:
the entirety of the application by Webster Financial Corporation to
merge with Sterling Bancorp, and thereby indirectly acquire Sterling
National Bank, including all portions for which the applicants have
requested confidential treatment, and for all records including
electronic records reflecting the FRS’ communications with or about
Webster or Sterling or either’s affiliates since January 1, 2020.
The Board makes every effort to fulfill requests in a timely manner; however,
there may be delays in fulfilling complex requests or those that require consultation.

May 31, 2021

Filed late May with the Fed: "Board of Governors of the Federal Reserve System  Attn: Chair Powell, Secretary Misback  20th Street and Constitution Avenue, N.W.  Washington, DC 20551     Re: Timely First Comment on Application by FirstBank Corp. of Fort Smith, Arkansas to acquire with Central Bancshares of Poteau, Inc., and Central National Bank of Poteau 

Dear Chair Powell, Secretary Misback and others in the FRS:  This is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Applications by First Bank Corp. of Fort Smith, Arkansas to acquire with Central Bancshares of Poteau, Inc., and Central National Bank of Poteau. The comment period runs through May 26; this comment is timely.    

  The applicant's First National Bank of Fort Smith in Arkansas in 2019, based on its disparate marketing, made 308 home loans to whites and only FIVE to African Americans.    This is totally unacceptable.     

 Beyond the objective data, consider this public review: "9/24/2020 My name is Kelli Cormier I have an account with first national Bank Fort Smith Arkansas I am currently in Louisiana helping my father file a [claim] for his damage to property I called the bank and the contact center but refusing to give me my bank account information I've always gotten the information before as long as I have a codename to get them and they know it's me all of a sudden I'm 10 hours away and they're refusing to give me my f*cking information that's all right I'm gonna make a 10 hour trip to go close out my f*cking account." See, here

Also "By far this bank has the worst customer service in the area. Unfriendly staff who make no attempt to resolve your issues or assist with your needs. The trust department specifically needs a reorganization."  
   The target, Central National Bank of Poteau, in 2019 in Oklahoma based on its marketing made 54 home loans to whites and NO (none, zero) to African Americans.   

There is no public benefit to this proposal.        FFW and Inner City Press have been deeply concerned about the rush by the FRS' penchant to rubberstamp mergers by redliners, particularly during the pandemic. We note the Fed's recent website statement that a comment period has been extended to allow participation amid the Coronavirus crisis. This should be done, by the Fed's logic, on this and other application. We timely request public hearings.  The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved.."

May 24, 2021


How much of a joke on FOIA is the Fed? Well, still no real documents in response to long-ago FOIA requests about Bangladesh Bank / Lazarus Heist, nor branch closings in low income areas, nor Wirecard...

May 17, 2021

So State Street Corp. has admitted it ripped customers off by $290 million with hidden bank fees, and it has agreed to pay a $115 million criminal penalty to resolve a long-running investigation into those practices, the U.S. Department of Justice announced - but where was the Fed on Swiss Life?

May 10, 2021

Fed does it again: "Dear Mr. Lee: This is in response to your electronic message dated April 3, 2021, and received by the Board’s Information Disclosure Section on April 5, 2021. Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request: the entirety of the application by Stock Yards Bancorp to acquire Kentucky Bancshares and Kentucky Bank including all portions for which the applicants have requested confidential treatment, and for all records including electronic records reflecting the FRS’ communications with or about MStock Yards Bancorp or Kentucky Bancshares or either affiliates since January 1, 2020. Given the public comment period here, this request should be expedited such that the records are provided before the comment period ends (for now, April 12). Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until May 17, 2021, in order to consult with two or more components of the Board having a substantial interest in the determination of the request."

 Fed closes comment period April 12, extends FOIA time to May 17....

May 3, 2021

After CRA Protest to M&T People's Fed Asked 32 Qs, As of April 30 No Answers So 2d Protest

By Matthew Russell Lee, Patreon Story
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, April 30 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And the proposed merger of two redlining banks, M&T and People's United, will be the litmus test.

  On March 27, Fair Finance Watch and Inner City Press on the FOIA filed a challenge with the Federal Reserve to the banks' application, below. We await full response to the FOIA.

  And on April 30, as the Federal Reserve and NYS comment period ostensibly closed, the Fed had STILL not provided the documents under FOIA, despite correctly granting expedited processing. And M&T which was told to send its response to question to Inner City Press, has not -- not by email, and not by regular mail. So Inner City Press has timely written to both regulators to demand that the comment period be extended. Watch this site.

April 26, 2021

While the Fed rubber stamps mergers and closes comment periods, this: "Monday, May 3 ***NEW YORK – Federal Reserve Bank of New York President John Williams speaks before Women in Housing and Finance Virtual Annual Symposium, 1410 EDT/1810 GMT. Via Webinar. Text and moderated Q&A expected." Moderated Q&A;

 Thursday, May 6 ***NEW YORK – Federal Reserve Bank of New York President John Williams gives opening and closing remarks before the New York Fed Web Series on Culture: Purpose and the Employee as Stakeholder, 0900 EDT/1300 GMT. Via Webinar. No text. No Q&A.."

No Q&A.

April 19, 2021

From the Fed:

This is in response to your email message dated April 3, 2021, and received by the Board’s Information Disclosure Section on April 5. Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you have requested: the entirety of the application by M&T to acquire People’s, including all portions for which the applicants have requested confidential treatment, and for all records including electronic records reflecting the FRS’ communications with or about M&T or People’s since January 1, 2020. You seek expedited processing for your request because you would like to receive the records before the comment period ends. You believe “[t]he merger, the fair lending and money laundering issues and branch closings, make it a matter of urgency.” The Board’s Rules Regarding Availability of Information provide that a requester seeking expedited processing should demonstrate “a compelling need for the records,” and that this need may be evidenced by a statement that “the requester is a representative of the news media . . . and there is urgency to inform the public concerning actual or alleged Board activity.” 12 C.F.R. § 261.12(c).  2  I have determined to grant your request for expedited processing. Accordingly, your request will be accorded priority treatment and processed as soon as practicable.

Good - but where are the documents?

April 12, 2021

From the Fed on April 8:

This is in reference to your email message dated March 10, 2021, and received by the Board’s Information Disclosure Section on March 11.  Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request:     all records in the possession or control of the FRS, from the past three years, regarding Wirecard, including but not reference to the bank’s collapse’s implications for the FRS’ view of German bank regulation under FBSEA. Inner City Press has been covering the US v. Weigand bank fraud trial in the SDNY, and Wirecard belatedly was raised in a cooperator’s testimony, as was OneCoin money launderer and Tbilisi banker Gilbert Armenta. Therefore, this is also a request for all records the FRS has, in the past three years, regarding Armenta, Ruja Ignatova, Mark Scott and/or OneCoin, and also regarding marijuana banking, central to the case(s).     Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until April 22, 2021, 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 April 22, 2021, 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.

 April 5, 2021

Filed with the Fed, after a full week of silence:

This is a formal FOIA request for the entirety of the application by M&T to acquire People's, including all portions for which the applicants have requested confidential treatment, and for all records including electronic records reflecting the FRS' communications with or about M&T or People's since January 1, 2020.

Note: in a letter emailed to the Board a full week ago, we requested a portion of these records and of of this date a week later have received no response at all, and no records. Given the public comment period here, this request should be expedited such that the records are provided before the comment period ends (for now, April 30). The merger, the fair lending and money laundering issues and branch closings, make it a matter of urgency.

March 29, 2021

CRA Litmus Test As M&T People's Challenged On Racial Disparities In Lending in NY CT PA

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, March 27 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And the proposed merger of two redlining banks, M&T and People's United, will be the litmus test.

  On March 27, Fair Finance Watch and Inner City Press on the FOIA filed a challenge with the Federal Reserve to the banks' application: "This is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Applications by M&T Bank Corporation to acquire People's United Financial.   

   The applicant M&T in New York State in 2019 made 8,613 home loans to whites and only 629 to African Americans.  M&T in New York State in 2019 made 3.4 loans to whites for each denial to whites. It made only 1.4 loans to African Americans for every denial to African Americans.  

 This is totally unacceptable.       

  The applicant M&T in Connecticut in 2019 made 251 home loans to whites and only 27 to African Americans.  M&T in Connecticut in 2019 made 2 loans to whites for each denial to whites. It made only 1.28 loans to African Americans for every denial to African Americans.    This is unacceptable. 

        The applicant M&T in Pennsylvania in 2019 made 3565 home loans to whites and only 106 to African Americans.

 M&T in Pennsylvania in 2019 made 2.52 loans to whites for each denial to whites. It made only 1.15 loans to African Americans for every denial to African Americans. 

  This is totally unacceptable.

     Meanwhile, People's says it will close some 140 branches.   

    FFW and Inner City Press have been deeply concerned about the rush by the FRS' penchant to rubberstamp mergers by redliners, particularly during the pandemic. We note the Fed's recent website statement that a comment period has been extended to allow participation amid the Coronavirus crisis. This should be done, by the Fed's logic, on this and other applications. We timely request public hearings.  

 The hearings, and your review, should also address M&T's discrimation, see, e.g., (EEOC v. Manufacturers and Traders Trust Co., d/b/a M&T Bank., Civil Action No. 1:16-cv-03180-ELH) in U.S. District Court for the District of Maryland, Northern Division.  See also, this.

  The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved.

March 22, 2021

The Federal Reserve doesn't think Wirecard, and the failure of the German regulators atop Deutsche Bank and Commerzbank is a matter of public or urgent concern: "Dear Mr. Lee: This is in reference to your email message dated March 10, 2021, and received by the Board’s Information Disclosure Section on March 11. Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request:  all records in the possession or control of the FRS, from the past three years, regarding Wirecard, including but not reference to the bank’s collapse’s implications for the FRS’ view of German bank regulation under FBSEA. Inner City Press has been covering the US v. Weigand bank fraud trial in the SDNY, and Wirecard belatedly was raised in a cooperator’s testimony, as was OneCoin money launderer and Tbilisi banker Gilbert Armenta. Therefore, this is also a request for all records the FRS has, in the past three years, regarding Armenta, Ruja Ignatova, Mark Scott and/or OneCoin, and also regarding marijuana banking, central to the case(s). You have requested expedited processing for your request. Pursuant to the Board’s Rules Regarding Availability of Information (“Board’s Rules”), as a member of the news media you are required to demonstrate that there is “[a]n urgency to inform the public about an actual or alleged Federal Government activity.”1 In support of your request for expedited treatment, you assert that “[t]hese are matters of public interest and urgency[.]” However, you have failed to explain why the information you have requested—approximately three (3) years of Board records—is urgently needed. Thus, I have determined that your request does not comply with the  1 12 C.F.R. § 261.12(c)(1)(i)-(ii).  2  criteria for expedited processing, because you have not set forth facts demonstrating an urgency to inform the public concerning actual or alleged Board activity.2 Your request for expedited processing, therefore, is denied without prejudice to your filing a new request providing additional information that meets the requirements of the Board’s Rules for expedited processing. Accordingly, your request is being processed under the Board’s normal FOIA procedures." We'll have more on this.

March 15, 2021

Webster Bank Games CRA with Health Savings Accounts Fair Finance Watch Challenged to OCC

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

SDNY COURT, March 13 – Among the comments on the Community Reinvestment Act submitted to the Federal Reserve is one from Webster Bank, arguing that Health Savings Account "deposits should not be considered when determining whether the requirement would apply or when delineating such assessment areas" and should be excluded from the definition of "retail domestic deposits."Consequently, HSAs should also be excluded from  Community Development Financing Metric.

This is scam. 

  Back on May 2, 2020 Fair Finance Watch, and Inner City Press on FOIA, filed a formal challenge with Otting's OCC to the application by Webster Bank to acquire State Farm Bank FSB, its problematic health savings accounts, no less. Here is some of it:

"This is a timely first comment opposing and requesting an extension of the OCC's public comment period on the Application by Webster Bank NA to acquire State Farm FSB / Health Savings Accounts. Given complaints against State Farm's HSAs, and Webster Bank's PPP performance, public hearings are needed when they are not, as now, prohibited by social distancing rules. The CRA deform proposal should be shelved.

While Comptroller Otting has said he never saw discrimination (except being told by family members about it), consider for the record on this application that even as reflected by the too-limited 2018 HMDA data available on the CFPB's website, Webster Bank in New York State in 2018 made 270 loans to whites - and only NINE to African Americans, out of proportion to the demographics of its service area and of other lenders' activities in it.       While making only NINE loans to African Americans in NYS in 2018, Webster denied 16 applications from Africans, much more disparate that its ratio for whites: 270 loans made, 145 denial: significantly more disparate to African Americans.

      This application should be denied. And for the record, the CFPB's elimination of the HMDA information that has been available on the FFIEC's and even its own website for 2017 data is part of the destruction of CRA and HMDA of which the OCC is a part.    

   Consider for the record that "the head of Waterbury-based Webster Bank admitted his company can improve its performance in getting money into the hands of loan applicants.  “Certainly we wanted to help every small business borrower and customer of Webster that we could,” said CEO John Ciulla, speaking Tuesday on a conference call. “We got through approximately 30 percent applications approved (and) 30 percent funded, plus or minus a few percentage points on both sides of that."  Webster Bank has the third biggest base of deposits in Connecticut, offering both traditional savings and loans accounts as well as a health-savings account business that is among the largest in the nation. On Tuesday, Webster bolstered its HSA Bank subsidiary with the acquisition of 24,000 health-savings accounts from State Farm totaling $140 million."     

 No, that has not been approved. And it should not be. #TreasureCRA. And see NCRC's dashboard of comments, here.

March 8, 2021

Wheels of justice - against tellers, not CEOs: "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 Jeremy Boles (“Boles”), a former 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 SunTrust Bank (the “Bank”), a state-member bank; WHEREAS, between June 10, 2016, and May 1, 2017, while employed as a Teller Coordinator at the Bank’s Hillsborough Square Branch in Tampa, Florida, Boles misappropriated funds from a Bank customer’s account for his personal benefit; WHEREAS, after the misconduct continued for nearly a year, Boles disclosed his conduct and paid restitution to the Bank in the full amount of the Bank’s loss in May 2017; WHEREAS, Boles’ conduct posed financial, legal and reputational risks to the Bank; WHEREAS, Boles’ conduct constituted violations of law or regulation, unsafe or unsound practices, and breaches of fiduciary duty; and 2 WHEREAS, by affixing his signature hereunder, Boles has consented to the issuance of this Order by the Board of Governors and has agreed to comply with each and every provision of this Order."

March 1, 2021

In CRA Test Challenges To VeraBank Panola Proposal CEO Tidwell Replies Fed Asks More

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, Feb 27 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open questions.

  On the 10th day of the new Administration, Fair Finance Watch with Inner City Press on the FOIA filed comments with the post-Brooks Office of the Comptroller of the Currency and with the Federal Reserve on a proposal by VeraBank of Texas to acquire Panola National Bank.

 The issues include that the applicant VeraBank in Texas in 2019 made 465 home loans to whites and only NINE to African Americans. Its denial rate for African Americans was more than FOUR TIMES than for whites.   

   That is to say, VeraBank in Texas in 2019 made 3.7 loans to whites for each denial to whites. It made less than one - 0.81 - loans to African Americans for every denial to African Americans.

   There is also this: "'In the second round we have seen about half the number of requests that we did in the first round,' said Brad Tidwell, president and CEO of Henderson-based VeraBank."

  To the OCC, the rubber-stamping of mergers by redliners under Brian Brooks and Joseph Otting has been explicitly noted. To the Fed, its logic in extending a recent comment period due to Coronavirus must apply to this and other applications.

  VeraBank CEO Brad Tidwell responded - but sent it only by regular mail, and not email. Now we have it, and it says among other things: "We take the issues that Mr. Lee raised in comment seriously, and we know that VeraBank, like all banks, can improve in extending credit to minority borrowers." Yes. It goes on: "relevant data for the 2019 HMDA reporting period: VeraBank had a 42% denial percentage for African American applicants and a 14% denial percentage for white applicants."

Is this acceptable?

The Fed has asked: "Page 16 of the Y-3 application describes the applicant’s plan to consolidate VeraBank’s branch located at 1708 East End Blvd North, Marshall, TX 75670 into the existing Panola National Bank branch located at 2203 Victory Drive, Marshall, TX 75672. VeraBank’s branch is currently located in a moderate-income/majority-minority census tract (0203.02) and Panola National Bank’s existing branch is currently located in an upper-income/non-majority minority census tract (0203.01). Please provide further information about the applicant’s rationale for consolidating VeraBank’s branch into Panola National Bank’s branch, and VeraBank’s plans to mitigate the impact of the consolidation on the bank’s community in the location to be closed. 2. Please provide an update on VeraBank’s Community Reinvestment Act efforts since the April 27, 2020, Community Reinvestment Act Performance Evaluation."

  The interim response, by email, is not from CEO Tidwell, but rather outside counsel, and says, "Please direct all future correspondence on this application to me."

These are litmus tests. Watch this site.

February 22, 2021

  Update from SDNY: "Sama v. Federal Reserve Bank of New York Case Number:    1:20-cv-10450-VEC Filer:     Document Number:    11 Docket Text: ORDER OF AUTOMATIC REFERRAL TO MEDIATION Mediator to be Assigned by 3/2/2021."

February 15, 2021

NY Federal Reserve Fired Ex FBI Agent Sama Escorted Him Out at 69 Now Cites Preemption

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Feb 9 – Robert N. Sama, 69, was terminated by the Federal Reserve Bank of New York on February 19, 2020. He had worked there since 2007.

He filed a lawsuit in the U.S. District Court for the Southern District of New York on December 10, 2020 - Inner City Press is reporting it that same day.  

From the complaint we learn that "each FRS Bank maintains an on-site law enforcement commad called a Law Enforcement Unit."

 Sama was Vice President of the FRBNY's LEU. He had previously been with the FBI for 29 years.  

After Sama's "escorted ejection," his job was given to LEU Captain Ronald Porter, who was "jumped three level" to handle Sama's LEU responsibilities. Here is Sama in a Fed report, as Vice President, Federal Reserve Law Enforcement. Law, indeed.

His complaint has been  assigned to SDNY Judge Valerie E. Caproni, and Magistrate Stewart D. Aaron.

Now on February 9, the FRBNY has filed an answer via an outside law firm, arguing among other things that the SDNY "lacks subject matter jurisdiction," that Sama "failed to mitigate his alleged damages" and that State and City claims are "preempted by federal law."

 Similarly, the Federal Reserve says that the FRBNY and other Reserve Banks are not subject to FOIA. Why then can they approve bank mergers? Inner City Press has a FOIA request pending.

The case is Sama v. Federal Reserve Bank of New York, 20-cv-10450 (Caproni)

February 8, 2021

  Just filed: "This is a FOIA request for the all withheld portions of the application to the Federal Reserve by Verbank to acquire Panola National Bank, including but not limited to presumptively mis-labeled “Confidential” exhibits: Reorganization Agreement 2 – Bank Merger Agreement 3 – Voting Agreement 4 – Employment Agreements 5 – Form of Director Support Agreement 6 – Form of Director Release 7 – Form of Officer Release 8 – Due Diligence Discussion 9 – Existing and Pro Forma Parent-Only and Consolidated Balance Sheets and  Regulatory Capital Schedules as of September 30, 2020  10 – Board Resolutions Approving the Reorganization Agreement, the First Merger,  the Bank Merger Agreement, and the Bank Merger   and for all record related to FRS communications with or about Verabank since January 1, 2020.  The Dallas Fed told Inner City Press: "If you seek the confidential portion of the application, you will need to submit a formal FOIA request to the Board of Governors  "    The request should be expedited and the records provided and appeal, if necessary, allow before the FRS comment period closes."

February 1, 2021

In extending the comment period, the Federal Reserve on its website says "The comment period is being extended to provide additional time for interested parties to comment on the application in light of the ongoing challenges from the coronavirus." But that is not in the Order the Fed published...

January 25, 2021

  No first VP at FRBNY -- "Michael Strine, first vice president of the Federal Reserve Bank of New York, previously announced his retirement at the conclusion of his current term on February 28, 2021. A search for his successor is now underway"

The others:  "The Federal Reserve Board on Thursday announced the approval of the reappointment of 12 Federal Reserve Bank presidents and 11 first vice presidents, as previously made by their respective boards of directors.1 Each individual has been approved to serve a new five-year term beginning March 1, 2021.  A list of presidents and first vice presidents, by Federal Reserve District, follows:  Boston: Eric S. Rosengren, president, and Kenneth C. Montgomery, first vice president  New York: John C. Williams, president  Philadelphia: Patrick T. Harker, president, and James D. Narron, first vice president  Cleveland: Loretta J. Mester, president, and Gregory L. Stefani, first vice president  Richmond: Thomas I. Barkin, president, and Becky C. Bareford, first vice president  Atlanta: Raphael W. Bostic, president, and André T. Anderson, first vice president  Chicago: Charles L. Evans, president, and Ellen J. Bromagen, first vice president  St. Louis: James B. Bullard, president, and Kathleen O. Paese, first vice president  Minneapolis: Neel T. Kashkari, president, and Ron J. Feldman, first vice president  Kansas City: Esther L. George, president, and Kelly J. Dubbert, first vice president  Dallas: Robert S. Kaplan, president, and Meredith N. Black, first vice president  San Francisco: Mary C. Daly, president, and Mark A. Gould, first vice president."

January 18, 2021

From the Fed's OIG: "Closed Investigations: 2020  Number Date Opened Date Closed Case Name 1 07/24/17 02/13/20 Alleged Bank Fraud 2 01/15/19 03/19/20 Employee Misconduct 3 09/27/18 03/27/20 Advance Fee Scheme 4 11/02/18 04/01/20 Alleged Bank Fraud 5 07/05/18 05/15/20 Advance Fee Scheme 6 08/11/15 06/23/20 Alleged Fraudulent Loans 7 04/23/20 06/30/20 Alleged Fraudulent Scheme 8 05/07/18 08/26/20 Alleged Bank Fraud 9 05/16/18 09/22/20 Alleged Bank Fraud 10 02/04/15 09/23/20 Alleged Bank Fraud 11 03/06/19 10/29/20 Alleged Bank Fraud 12 01/14/20 11/17/20 Alleged Fraudulent Scheme 13 11/09/18 12/15/20 Employee Misconduct 14 06/09/20 12/31/20 Alleged Fraudulent Loans" We'll have more on this.

January 11, 2021

 Here from the Council on Foreign Relations... Richard H. Clarida: "It is my pleasure to meet virtually with you today at the Council on Foreign Relations.1 I regret that we are not doing this session in person, as we did last year, and I hope the next time I am back, we will be gathering together in New York City again. I look forward to my conversation with Steve Liesman and to your questions, but first, please allow me to offer a few remarks on the economic outlook, Federal Reserve monetary policy, and our new monetary policy framework.  Current Economic Situation and Outlook In the second quarter of last year, the COVID-19 (coronavirus disease 2019) pandemic and the mitigation efforts put in place to contain it delivered the most severe blow to the U.S. economy since the Great Depression." And CRA? Watch this site.

January 4, 2021

Fed Governor Brainard: ...The Federal Reserve Financial Stability Report incorporated for the first time an analysis of the ways climate change could present risks to financial stability.38 Similarly, the Federal Reserve Supervision and Regulation Report described how climate-related risks can create microprudential risks and how supervisors are working to better understand, measure, and mitigate these risks.39 Last quarter, the Federal Reserve released a CRA proposal that for the first time highlighted the importance of investing in climate resilience for LMI and underserved communities.

We'll have more on this.

December 28, 2020

Look at the chair and vice chair of the Federal Reserve Bank of Dallas:  Dallas Greg L. Armstrong, co-founder and chairman and chief executive officer (retired), Plains All American Pipeline L.P., Houston, Texas, renamed Chair. Thomas J. Falk, executive chairman (retired), Kimberly-Clark Corporation, Dallas, Texas, renamed Deputy Chair.

Pipeline and Kimberly-Clark.

December 21, 2020

Gov Brainard at CBA:  we aim to modernize the CRA in a way that advances the core purpose of the statute, while also providing greater certainty, tailoring regulations, and minimizing burden. Over the next few months, the Federal Reserve System will host outreach meetings and listening sessions like this one around the country. We encourage the public to submit written comments by the deadline of February 16, 2021, and I look forward to your feedback [here]

December 14, 2020

NY Federal Reserve Firing Former FBI Agent Escorted Him Out at 69 So He Sues in SDNY

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Dec 10 – Robert N. Sama, 69, was terminated by the Federal Reserve Bank of New York on February 19, 2020. He had worked there since 2007.

He filed a lawsuit in the U.S. District Court for the Southern District of New York on December 10, 2020 - Inner City Press is reporting it that same day.  

From the complaint we learn that "each FRS Bank maintains an on-site law enforcement commad called a Law Enforcement Unit."

 Sama was Vice President of the FRBNY's LEU. He had previously been with the FBI for 29 years.  

After Sama's "escorted ejection," his job was given to LEU Captain Ronald Porter, who was "jumped three level" to handle Sama's LEU responsibilities.

  The complaint calls the FRB a "privately held corporation... not a federal agency and its employees are not federal employees with the protections inherent therein."  

 Similarly, the Federal Reserve says that the FRBNY and other Reserve Banks are not subject to FOIA. Why then can they approve bank mergers? Inner City Press has a FOIA request pending.

The case is Sama v. Federal Reserve Bank of New York, 20-cv-10450 (Unassigned)

December 7, 2020

To Federal Reserve Waller Squeaks In 48-47 In Lame Duck Distanced Self From Judy Shelton

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

SOUTH BRONX, Dec 5 – In the midst of the Coronavirus pandemic and the election, with a fintech and crypto-currency proponent installed as Acting Comptroller, SoFi and its controller SoftBank sought to get and then got a U.S. national bank charter. Now Judy Shelton is still being pushed for the Federal Reserve, albeit with dwindling chances.

 Her fellow-nominee Christopher Waller, who squeaked in last week 48-47 as the first lame duck Fed confirmee, said this about Shelton:

Q: Mr. Waller, given Ms. Shelton’s answers on monetary policy in her thirty years of writing on the gold standard, would you recommend we confirm her to the Fed?

Waller:  Senator, that’s your decision, not mine. 

Sen. Brown: I figured that would be your answer. Let me ask in a different way. So, you’re at St. Louis Fed, right? 

Waller: Correct. 

Sen. Brown: If you were interviewing for your research department, would you hire her? 

Waller: I have a very different research department, in terms of the type of academic research we do. Judy’s been much more in the public light, in terms of her research. My department’s all publishing for academic journals. No, that’s not [inaudible] 

Sen. Brown: If someone brought her body of work and writing to you, would you hire her? Or him? 

Waller: Like I said, where her outlets are compared to what we expect our staff… They’re just two different outlets for your research

 As of November 16, there are at least three GOP senators opposing. Joining Senators Collins and Romney, Senator Lamar Alexander said “I oppose the nomination of Judy Shelton because I am not convinced that she supports the independence of the Federal Reserve Board as much as I believe the Board of Governors should. I don’t want to turn over management of the money supply to a Congress and a President who can’t balance the federal budget.” And of course there are also CRA and fair lending laws.

 On November 17, cloture for her failed 47-50. Sen McConnell switched his "yes" vote to "no," to let him attempt to re-vote again. Watch this site.

November 30, 2020

Federal Reserve Board Is Sued For FOIA About Maiden Lane and FRBNY Now To 2d Cir

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Nov 28 – The U.S. Federal Reserve Board got a Freedom of Information Act request for "any records from Maiden Lane LLC and Maiden Lane II LLC and Maiden Lane III LLC containing the CUSIP Number 40431LAR9."

The Fed Board denied it "because these loans were issued by the FRB of New York, not as a delegated function of the Board."  

That is to say, the Federal Reserve Board is again saying its its Reserve Banks, to which it delegates rubber stamping of mergers, are not subject to FOIA. 

  In this case, the Federal Reserve Board has not sent its own lawyers, as it did when Inner City Press sued it under FOIA.

Instead, it is represented, like ICE or other agencies, by the US Attorney's Office at 86 Chambers Street.

  Now there's a bid to appeal to the Second Circuit Court of Appeals.

The case is Junk v. Board of Governors of the Federal Reserve System, 19-cv-385 (Cote).

November 23, 2020

To Federal Reserve Judy Shelton Fails 47-50 For Now But Another Attempt May Be Made

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

SOUTH BRONX, Nov 17 – In the midst of the Coronavirus pandemic and the election, with a fintech and crypto-currency proponent installed as Acting Comptroller, SoFi and its controller SoftBank sought to get and then got a U.S. national bank charter. Now Judy Shelton is being pushed for the Federal Reserve.

 As of November 16, there are at least three GOP senators opposing. Joining Senators Collins and Romney, Senator Lamar Alexander said “I oppose the nomination of Judy Shelton because I am not convinced that she supports the independence of the Federal Reserve Board as much as I believe the Board of Governors should. I don’t want to turn over management of the money supply to a Congress and a President who can’t balance the federal budget.” And of course there are also CRA and fair lending laws.

 On November 17, cloture for her failed 47-50. Sen McConnell switched his "yes" vote to "no," to let him attempt to re-vote again. Watch this site.

November 16, 2020

To Federal Reserve Board Judy Shelton Is Being Pushed Like Lameduck OCC OKing Charters

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

SOUTH BRONX, Nov 12 – In the midst of the Coronavirus pandemic and the election, with a fintech and crypto-currency proponent installed as Acting Comptroller, SoFi and its controller SoftBank sought to get and then got a U.S. national bank charter. Now Judy Shelton is being pushed for the Federal Reserve.

 Meanwhile Inner City Press' requests under the Freedom of Information Act into Acting Comproller Brian P. Brooks' conflicts of interest in the fintech and crypto-currency world have yet to be fully answered.  

   On November 9, Fair Finance Watch and Inner City Press have begun a call to block Brooks from handing out any more national bank charters between now and January 20 - such charters would be illegitimate, gifts by a lame duck. How much more so this: the Senate majority says it is moving forward to have a vote on a long-pending Federal Reserve Board nominee, Judy Shelton. Even in September 2020 she was said to not have the votes for confirmation.  We'll have more on this.

On July 13 Fair Finance Watch filed with the OCC, including this: "July 13, 2020
 Office of the Comptroller of the Currency  DC Comptroller Brooks and Mr. Lybarger, Deputy Comptroller for Licensing  & Northeastern District Office 
 Re: Timely First Comment on SoFi's reported application to the OCC to get into banking 

Dear Mr. Lybarger, Ms. Cummings and others in the OCC:  This is a timely first comment opposing and requesting an extension of the required OCC's public comment period on reported proposal by SoFi to get a national bank charter.  

    This is a major proposal, by a fintech in which SoftBank has a large stake. Yet, it is not yet on the OCC's website, where as of July 13 the most recent Weekly Bulletin cuts on on July 4. The only charter application listed as open for comment is Monzo Bank; the New Bank application link does not work. So, any comment period will have be be extended. This is a request for the complete application, all portions that the OCC after review does not find withholdable under FOIA. 

     Inner City Press / Fair Finance Watch opposed SoFi's previous, suspended attempt to get into banking. Since then the questions have only grown.  

    For now, we note that Inner City Press asked the OCC's FOIA unit for a copy of Comptroller Brooks' conflict of interest list with fintechs but has yet to receive it. Pending receipt, we ask that Acting Comptroller Brooks be recused from this application and that you confirm this in writing.

      As to SoftBank, the dispute regarding another of its holdings, WeWork, portends the type of problems that regulators like the OCC are directed to keep out of, not invite into, the banking system.

     For the above reasons, including the ongoing COVID-19 pandemic lockdowns and restrictions, the comment period should not yet start or should extended, until in person public hearings can be held, and Comptroller Brooks' should be recused pending/and his conflict of interest list should be released."

And now on October 28, Brooks' OCC has rubber stamped the application, stating "The OCC received one comment related to the Proposed Bank’s plans for complying with the Community Reinvestment Act (CRA, 12 USC 2901 et seq.), asserting, among other things, that the CRA plan included with the application only provides an outline of proposed activities without sufficient details. The OCC also received one other comment opposing approval of the charter application for reasons not related to the CRA and requesting an extension of the comment period. The CRA requires that the OCC take a national bank’s or federal savings association’s (bank) CRA record into account when evaluating an application for a deposit facility. 12  SoFi Bank, National Association, Cottonwood Heights, Utah (proposed) OCC Control Nos. 2020-WE-Charter-315294 and 2020-WE-Waiver-315536  2  USC 2903(a)(2). An application for a deposit facility is defined to mean, among other things, “a charter for a national bank or federal savings and loan association.” 12 USC 2902(3)(A). The CRA regulations require that “[a]n applicant... for a national bank charter must submit with its application a description of how it will meet its CRA objectives, if applicable.” 12 CFR 25.02(b). The Proposed Bank’s charter application included a CRA plan that provided an initial description of how it proposes to help meet the credit needs of its community. With regard to the commenter’s concerns about the sufficiency of the Proposed Bank’s CRA plan, the CRA requires the OCC to consider a proposed insured bank’s description of how it will meet the credit needs of its community in considering a charter application. 12 CFR 25.02(b). The OCC expects that organizers of a bank will begin to develop a CRA plan during the charter application phase; however, the OCC does not expect a bank to have a fully developed plan at this stage. The CRA plan should be finalized after a bank has received preliminary conditional approval from the OCC, but prior to final approval of the charter application. The Bank has demonstrated in its charter application and through discussions with OCC staff that it understands the requirements of the CRA and has begun to develop a CRA plan. The Bank is considering a strategic plan pursuant to 12 CFR 25.18, and the OCC will work with the Bank in the development of a strategic plan if this alternative is chosen." Rush job, rubber stamp. Watch this site.

November 9, 2020

From the Fed last week: "While this report is focused on safety and soundness initiatives, it is also important to note that on September 21, 2020, the Board issued an Advance Notice of Proposed Rulemaking to modernize the regulations to implement the Community Reinvestment Act with a 120-day comment period.6 6 See Board of Governors of the Federal Reserve System, “Federal Reserve Board Issues Advance Notice of Proposed Rulemaking on an Approach to Modernize Regulations That Implement the Community Reinvestment Act,” news release, September 21, 2020, https://www.federalreserve.gov/newsevents/pressreleases/bcreg20200921a.htm

yeah...

November 2, 2020

  Amid the exposed failure of the SARs system, the Federal Reserve has come out with a decidedly uninspiring proposal: "The Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board today invited comment on a proposed rule that would amend the recordkeeping and travel rule regulations under the Bank Secrecy Act. FinCEN and the Board, pursuant to their shared authority, are proposing amendments to the recordkeeping rule jointly, while FinCEN, pursuant to its sole authority, is proposing amendments to the travel rule.  Under the current recordkeeping and travel rule regulations, financial institutions must collect, retain, and transmit certain information related to funds transfers and transmittals of funds over $3,000. The proposed rule lowers the applicable threshold from $3,000 to $250 for international transactions. The threshold for domestic transactions remains unchanged at $3,000." Oh.

October 26, 2020

Banco Bradesco Over Inner City Press Protest OKed Now Appeal Not Shown To Fed Board

By Matthew R. Lee, Exclusive

SOUTH BRONX, Oct 20 – 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.

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

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

 On October 7 the Federal Reserve rubber stamped the troubled and troubling merger, stating in part that "A commenter objected to the proposal and alleged disparities in the number of home purchase loans made by BAC Bank to African Americans and Hispanics, as compared to Asians, in the New York City Metropolitan Statistical Area (“New York City MSA”), based on data that BAC Bank reported under the Home Mortgage Disclosure Act of 1975 (“HMDA”) for its 2017 mortgage-related lending activities. 29 In  27 12 U.S.C. § 2903. 28 Bradesco’s New York branch is not authorized to take insured deposits and is not subject to the CRA. 29 12 U.S.C. § 2801 et seq. - 12 - addition, the commenter asserted that BAC Bank denied 100 percent of home purchase applications from Hispanics in the New York City MSA based on the bank’s 2017 HMDA data. The commenter also alleged disparities in the number of home purchase loans made by BAC Bank to African Americans as compared to Whites in the Miami, Florida MSA, based on 2017 HMDA data. Furthermore, the commenter alleged that the proposal does not have a public benefit, including under the CRA, and that Bradesco plans to acquire BAC Bank to disproportionately serve affluent clients. BAC Bank’s Business and Applicants’ Response to the Public Comments BAC Bank offers a variety of products and services in the areas of personal banking, wealth management, corporate banking, institutional banking, and real estate financing. BAC Bank serves domestic and international customers, and, as previously noted, the bank’s sole deposit-taking office is located in Florida. In response to the public comments, Bradesco asserts that the fair lending and CRA records of BAC Bank do not support a conclusion that the bank has engaged in improper lending practices." Yeah.

 So on October 15, we filed a timely request for reconsideration: "Re: Timely Request for Reconsideration of FRB approval, with information about COVID-19 Impacts withheld and BAC lending record ignored, of Banco Bradesco to acquire BAC Florida  Dear Chair Powell"   This is a timely request for reconsideration of the above-captioned application. As you may know, Inner City Press / Fair Finance Watch timely opposed the application on CRA and then other grounds, including the need to publicly disclose the financial irregularities of Banco Bradesco and the impact of COVID-19 on this proposed transaction.      All of these records were withheld, and BAC's CRA and fair lending records was ignored, to deliver up an approval on the applicant's timeline. This "servicing" of the industry cannot continue on this timely request, which the full Board should consider at an in person meeting.    As we stated in August 2019, 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...  We submitted a FOIA request for all of the redacted information - in fact, it should have been provided forthwith under the Ex Parte Rules. But it never was."

  On October 20 Inner City Press got a voice mail then an email stating that the request for reconsideration had not even gone to the insulated Board members (two seats are vacant), but was denied by the Fed's General Counsel. We'll have more on this.

October 19, 2020

Banco Bradesco Over Inner City Press Protest Rubber Stamped So Filing to Federal Reserve

By Matthew R. Lee, Exclusive

SOUTH BRONX, Oct 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.

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

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

 Now on October 7 the Federal Reserve has rubber stamped the troubled and troubling merger, stating in part that "A commenter objected to the proposal and alleged disparities in the number of home purchase loans made by BAC Bank to African Americans and Hispanics, as compared to Asians, in the New York City Metropolitan Statistical Area (“New York City MSA”), based on data that BAC Bank reported under the Home Mortgage Disclosure Act of 1975 (“HMDA”) for its 2017 mortgage-related lending activities. 29 In  27 12 U.S.C. § 2903. 28 Bradesco’s New York branch is not authorized to take insured deposits and is not subject to the CRA. 29 12 U.S.C. § 2801 et seq. - 12 - addition, the commenter asserted that BAC Bank denied 100 percent of home purchase applications from Hispanics in the New York City MSA based on the bank’s 2017 HMDA data. The commenter also alleged disparities in the number of home purchase loans made by BAC Bank to African Americans as compared to Whites in the Miami, Florida MSA, based on 2017 HMDA data. Furthermore, the commenter alleged that the proposal does not have a public benefit, including under the CRA, and that Bradesco plans to acquire BAC Bank to disproportionately serve affluent clients. BAC Bank’s Business and Applicants’ Response to the Public Comments BAC Bank offers a variety of products and services in the areas of personal banking, wealth management, corporate banking, institutional banking, and real estate financing. BAC Bank serves domestic and international customers, and, as previously noted, the bank’s sole deposit-taking office is located in Florida. In response to the public comments, Bradesco asserts that the fair lending and CRA records of BAC Bank do not support a conclusion that the bank has engaged in improper lending practices." Yeah.

 Now on October 15, we have filed this timely request for reconsideration: "Re: Timely Request for Reconsideration of FRB approval, with information about COVID-19 Impacts withheld and BAC lending record ignored, of Banco Bradesco to acquire BAC Florida  Dear Chair Powell"   This is a timely request for reconsideration of the above-captioned application. As you may know, Inner City Press / Fair Finance Watch timely opposed the application on CRA and then other grounds, including the need to publicly disclose the financial irregularities of Banco Bradesco and the impact of COVID-19 on this proposed transaction.      All of these records were withheld, and BAC's CRA and fair lending records was ignored, to deliver up an approval on the applicant's timeline. This "servicing" of the industry cannot continue on this timely request, which the full Board should consider at an in person meeting.    As we stated in August 2019, 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...  We submitted a FOIA request for all of the redacted information - in fact, it should have been provided forthwith under the Ex Parte Rules. But it never was." We'll have more on this.

October 12, 2020

Federal Reserve Banco Bradesco Q&A After Inner City Press Protest Leads To Rubber Stamp

By Matthew R. Lee, Exclusive

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

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

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

 Now on October 7 the Federal Reserve has rubber stamped the troubled and troubling merger, stating in part that "A commenter objected to the proposal and alleged disparities in the number of home purchase loans made by BAC Bank to African Americans and Hispanics, as compared to Asians, in the New York City Metropolitan Statistical Area (“New York City MSA”), based on data that BAC Bank reported under the Home Mortgage Disclosure Act of 1975 (“HMDA”) for its 2017 mortgage-related lending activities. 29 In  27 12 U.S.C. § 2903. 28 Bradesco’s New York branch is not authorized to take insured deposits and is not subject to the CRA. 29 12 U.S.C. § 2801 et seq. - 12 - addition, the commenter asserted that BAC Bank denied 100 percent of home purchase applications from Hispanics in the New York City MSA based on the bank’s 2017 HMDA data. The commenter also alleged disparities in the number of home purchase loans made by BAC Bank to African Americans as compared to Whites in the Miami, Florida MSA, based on 2017 HMDA data. Furthermore, the commenter alleged that the proposal does not have a public benefit, including under the CRA, and that Bradesco plans to acquire BAC Bank to disproportionately serve affluent clients. BAC Bank’s Business and Applicants’ Response to the Public Comments BAC Bank offers a variety of products and services in the areas of personal banking, wealth management, corporate banking, institutional banking, and real estate financing. BAC Bank serves domestic and international customers, and, as previously noted, the bank’s sole deposit-taking office is located in Florida. In response to the public comments, Bradesco asserts that the fair lending and CRA records of BAC Bank do not support a conclusion that the bank has engaged in improper lending practices." Yeah. We'll have more on this.

October 5, 2020

Fed Inaction As Amid PPP Abuse Lenders Like Live Oak Bank Issue Prurient Denial To Inner City Press Data Q

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

SDNY COURT / SOUTH BRONX, Oct 1 –     Amid the COVID-19 pandemic, fair lending and the Community Reinvestment Act are taking a back seat, or worse. Some banks to which CRA applies are excluding smaller businesses and those in communities of color. And some banks bragging about the PPP loans won't provide any information - we are Pressing.

   Inner City Press / Community on the Move has begun contacting both banks and non-banks for their Paycheck Protection Program data. Without yet getting into the full results, note that Inner City Press asked Live Oak Bank, twice: "On behalf of Inner City Press / Community on the Move and its Fair Finance Watch project, and in my personal capacity, this is a formal request for Live Oak's full CRA Public File and pressingly for the following with regard to the Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL), in light of the COVID-19 pandemic and the need for this information:  1. How many loans has Live Oak made pursuant to the programs?  2. What is the total dollar amount of loans made pursuant to the program  3. What is the average loan size? ... 9. What percentage of your PPP loans are to borrowers with a previous borrowing relationship with your institution?"

  Their SVP for communications sent only the CRA file, performance evaluation and strategic plan - no date. Now after months of non response on data by Live Oak Bank, on October 1 came this:

"Thank you for your interest in Live Oak Bank Based on your responses, our loan programs are not a fit for your business at this time. Some of the most common reasons for this are listed below:   Loan amount is below our minimum   Business is not based in the United States   FICO credit score does not meet our minimum requirements   Prior bankruptcy   Prior loss to creditors or government   Pending legal action   Presently suspended, debarred, proposed for debarment, declared ineligible or voluntarily excluded from participation in this transaction by any Federal department or agency   Revenues derived from gambling, loan packaging, or from the sale of products or services, or the presentation of any depiction, displays or live performances, of a prurient sexual nature."
Oh really... We'll have more on this.

Meanwhile the Fed is pushing forward to approve bank merger applications, like Banco Bradesco - BAC which Fair Finance Watch has been opposing

September 28, 2020

  So how did the Federal Reserve keep rubber stamping for the banks now being exposed for failing to asked on FinCen SARs? We'll have more on this.

September 21, 2020

  What a scam: now Banco Bradesco, in a response they want partial withheld, argues that its "pecuniary contribution" in Brazil is not really a fine. Really?

September 14, 2020

Why doesn't the Federal Reserve's OMWI report address the way the Fed's work impact, and often short changes, communities of color and minority and women owned businesses? We'll have more on this. https://www.federalreserve.gov/publications/March-2020-Report-to-the-Congress-on-the-Office-of-Minority-and-Women-Inclusion.htm

September 7, 2020

Federal Reserve Amid Covid Asks Banco Bradesco of BCB Fine cc Fair Finance Watch

By Matthew R. Lee, Exclusive

SOUTH BRONX, SDNY, Sept 4 – 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.

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

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

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

  Now on September 4, the Fed has asked this: "We refer to the application filed on behalf of Banco Bradesco, S.A., Lecce Holdings S.A., Fundação Bradesco, BBD Participações S.A., Nova Cidade de Deus Participações S.A., and Cidade de Deus Cia. Commercial de Participações, (“Bradesco”) all of Osasco, São Paulo, Brazil, to become bank holding companies by acquiring substantially all of the shares of BAC Florida Bank, Coral Gables, Florida, pursuant to Section 3 of the Bank Holding Company Act, as amended (“BHC Act”).  Based on our review of the current record, we request the following additional information. Please also respond to the questions in the Confidential Annex. Supporting documentation should be provided, as appropriate.  1. Describe any situations in which the Central Bank of Brazil (“BCB”) has imposed fines  higher than the contribution payment made by Bradesco under the Termo De Compromisso (“Termo”) with the BCB on May 29, 2020.  2. Please confirm whether any of the transactions or activity addressed in the Termo relate  to USD transactions transmitted through financial institutions in the United States.  Please provide your response addressed to the undersigned within 8 business days of the date of this letter. Any information for which confidential treatment is desired should be so labeled and separately bound in accordance with Section 261.15 of the Board's Rules Regarding Availability of Information. In addition, in accordance with the Federal Reserve's ex parte procedures, provide a copy of the public portion of your response (together with any attachments) directly to the commenter." Watch this site.

 Fair Finance Watch is proposing a CRA requirement on all Payroll Protection Program lenders - all of them - and raised this to Congressional leadership. #TreasureCRA. Watch this site.

August 31, 2020

  So the Fed correctly sent to the board a challenged application by First Illinois Bancorp - while on a policy setting sell-out application by Varo, it confined it at Federal Banks of SF to rubber stamp. This is a scam.

August 24, 2020

At the Federal Reserve, FOIA appeals used to be handled by a Governor, for a time, Governor Powell. Now it's just one staff member rubber stemping the withholdings of another: Inner City Press this week got this: "Based on a de novo review of the Deputy Secretary’s decision, and upon the recommendation of counsel regarding the legal issues involved, I affirm the Deputy 2 See 5 U.S.C. §§ 552(b)(1)-(9). 3 5 U.S.C. § 552(b)(4). 4 Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356, 2366 (2019).  3  Secretary’s decision to withhold information contained in Banco Bradesco’s May 29 response to an additional information request from the Federal Reserve Bank of New York and the Board, pursuant to exemption 4. If you believe that the Board is withholding information from you contrary to your legal rights, you may seek judicial review of my decision in an appropriate United States District Court pursuant to 5 U.S.C. § 552(a)(4)(B). Additionally, if you have any questions regarding the processing of your request, you may contact the Board’s FOIA Public Liaison, Ms. Candace Ambrose, at 202-452-3684 for assistance.5  Sincerely, (Signed) Ann E. Misback Ann E. Misback Secretary of the Board."

August 17, 2020

The regulators, even amid the COVID-19 pandemic, have shown a willingness to rubber stamp applications including the Federal Reserve on a "delegate" / approval-only basis as they did with Varo's application to become a bank holding company.   Inner City Press / Fair Finance Watch immediately wrote in appeal to the Board - and still no answer...

August 10, 2020

Federal Reserve Rubber Stamp of Varo Bank Protested to Chair Powell Collusion With OCC

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

South Bronx, Aug 3 –  How corrupt has the Federal Reserve become using the COVID-19 pandemic as ground cover? Well, despite rules that substantively challenged applications can only be approved by the Board of Governors in DC, on July 28 the Fed rubber stamped on a delegated basis fintech Varo's application to form a bank holding company. It is an unprecedented now low - but happens while the Federal Reserve withholds under FOIA all information about the impact of COVID-19 on the application by Brazil-based Banco Bradesco. Something has gone dreadfully wrong on C St.

  Here's the Fed's - Federal Reserve Bank of San Francisco's - July 28 letter, sent to Inner City Press: "Dear Mr. Walsh: The Federal Reserve Bank of San Francisco (“Reserve Bank”), acting under authority delegated by the Board of Governors of the Federal Reserve System (“Board”), and having considered the relevant statutory factors, hereby approves the subject application. In consideration of this filing, reliance was placed upon all the representations and the commitments made by or on behalf of Bancorp. No significant changes in the transaction should be made prior to consummation without our approval. Approval of the application is subject to the Board’s authority to require reports by and make inspections and examinations of BHCs and their subsidiaries, and to require such modification or termination of activities of a holding company or any of its subsidiaries as the Board finds necessary to ensure compliance with the BHC Act. Approval of the application is also subject to receipt of all other required regulatory approvals, non-objections, or consents with this transaction. The proposed transaction may be consummated upon approval. 1 Please notify the undersigned in writing when the transaction is consummated."

 Then the FRBSF wrote to Inner City Press saying it had five days until August 3 at 5 pm PST to request review. We have: "On behalf of Inner City Press / Fair Finance Watch and in my personal capacity, this is questionlessly timely request for review of the FRBSF's unprecedented and shamefully rubber stamping on delegated authority - which authority is ONLY to approval - of the application by Varo to get into banking (through the OCC), renewed complaint about the FRB's failure update its H2A, its continued processing and rubber-stamping of expansion applications amid the COVID-19 pandemic and on the withholding of HMDA data in online form by CFPB and other FFIEC regulators including the FRB - and a demand for actions.    On June 10 Inner City Press submitted to the Board a timely comment. We heard nothing bank - no Additional Information letter to Varo, no request to us for information - until receiving first a copy of the FRBSF's approval, then a letter which did not even mention most of the issues we raised to the Board in June. We wrote to the Board because we have no confidence at all in the FRBSF, which did not purport to explain the withholding of information from the public nor its craven rubber stamping to go along with the OCC, during pandemic lockdown no less.    We immediately wrote back to the FRBSF, again with no response: This is to confirm receipt of your letter - and to immediately inform you of Inner City Press / Fair Finance Watch's outrage that this important application was rubber stamped on a delegated basis by a Reserve Bank which can only approve. This is a new low -- applications by much smaller institutions, raising many fewer issues, are sent to the Board of Governors for decision. This is a major mistake - we will be pursuing it, and urge that there be no consummation of this illegitimate delegated rubber-stamp.     The FRB has coordinated its timing with the OCC of Brian Brooks, who has numerous conflicts of interest in the fintech field.    The FRBSF has become not a regulator, but a cheerleader. As to Varo, consider for example their service interruption in October 2019, including declined debit card transactions, which they tried to blame on their processor Galileo... More fundamentally, consider weakened CRA duties, and disproportionate exclusion: low and moderate consumers disproportionately have prepaid or limited data plans and face disconnections of their mobile service. And just because consumers have email addresses does not mean that they have regular internet access, and if they close or move their accounts, they may lose access to their financial records. We requested and request hearings. .This shameful delegated authority approval by the FRBSF timed to collude with the OCC with its conflicts of interest must be rescinded." Watch this site.

August 3, 2020

Federal Reserve Rubber Stamps Varo Into Banking On Delegated Basis As Denies FOIAs

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

South Bronx, July 28–  How corrupt has the Federal Reserve become using the COVID-19 pandemic as ground cover? Well, despite rules that substantively challenged applications can only be approved by the Board of Governors in DC, on July 28 the Fed rubber stamped on a delegated basis fintech Varo's application to form a bank holding company. It is an unprecedented now low - but happens while the Federal Reserve withholds under FOIA all information about the impact of COVID-19 on the application by Brazil-based Banco Bradesco. Something has gone dreadfully wrong on C St.

  Here's the Fed's - Federal Reserve Bank of San Francisco's - July 28 letter, sent to Inner City Press: "July 28, 2020 Via Electronic Mail Mr. Colin Walsh Varo Money, Inc. 222 Kearny Street, 9th Floor San Francisco, California 94108 RE: Varo Money, Inc., San Francisco, California (“Bancorp”), to become a bank holding company (“BHC”) through the acquisition of 100 percent of the voting shares of Varo Bank, N.A. (In Organization), Draper, Utah, pursuant to Section 3(a)(1) of the Bank Holding Company Act (“BHC Act”) Dear Mr. Walsh: The Federal Reserve Bank of San Francisco (“Reserve Bank”), acting under authority delegated by the Board of Governors of the Federal Reserve System (“Board”), and having considered the relevant statutory factors, hereby approves the subject application. In consideration of this filing, reliance was placed upon all the representations and the commitments made by or on behalf of Bancorp. No significant changes in the transaction should be made prior to consummation without our approval. Approval of the application is subject to the Board’s authority to require reports by and make inspections and examinations of BHCs and their subsidiaries, and to require such modification or termination of activities of a holding company or any of its subsidiaries as the Board finds necessary to ensure compliance with the BHC Act. Approval of the application is also subject to receipt of all other required regulatory approvals, non-objections, or consents with this transaction. The proposed transaction may be consummated upon approval. 1 Please notify the undersigned in writing when the transaction is consummated."

  Corrupt.

July 27, 2020

Filed with the Fed: "This is a FOIA appeal of the Deputy Secretary's July 17 denial in full of my and Inner City Press' June 7 FOIA request for the withheld portions of the additional information submitted by Banco Bradesco on or about May 29, 2020 as part of its challenged but still being processed amid the COVID-19 pandemic to aquire BAC including but not limited to the redaction of the entire answer to the Fed's telephonic question (not otherwise provided to ICP) about the effect of the travel ban on Brazil on the proposed transaction.    It is an outrage that every single word in this bank's response about this PUBLIC HEALTH emergency is being withheld by the Federal Reserve.  Note: processing of this application should be suspended until COVID-19 restrictions, which continue in New York, are lifted."
July 20, 2020

It took the Fed SIX WEEKS to issue this denial in full: "This is in response to your email message dated June 7, 2020, received by the Board’s Information Disclosure Section on June 8. Pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, you request:  all withheld portions of the additional information submitted by Banco Bradesco on or about May 29, 2020 as part of its challenged but still being processed amid the COVID-19 pandemic to aquire [sic] BAC including but not limited to the redaction of the entire answer to the Fed’s telephonic question (not otherwise provided to ICP) about the effect of the travel ban on Brazil on the proposed transaction. Staff searched Board records and located information that is responsive to your request. I have determined, however, that the redacted portions of the May 29 letter and the confidential exhibits consist of confidential commercial and financial information (e.g., business plans and strategies; financial statements). This information is subject to withholding and will be withheld from you pursuant to exemption 4 of the FOIA, 5 U.S.C. § 552(b)(4). I have also determined that the information should be withheld because it is reasonably foreseeable that disclosure would harm an interest protected by an exemption described in subsection (b) of the FOIA, 5 U.S.C. § 552(b). The responsive documents have been reviewed under the requirements of subsection (b) and all reasonably segregable nonexempt information will be provided to you. The document being provided to you will indicate the amount of information that has been withheld and the applicable exemption. In addition, approximately 30 pages of information will be withheld from you in their entirety.  2  Accordingly, your request for the withheld portions of Banco Bredesco’s May 29 submission is denied in full for the reason cited above."

July 13, 2020

The Fed asks for more time - so it can't just rubber stamp for Bradesco, can they? "FOIA Request No. F-2020-00240     Dear Mr. Lee:     On June 8, 2020, the Board of Governors (“Board”) received your correspondence dated June 7, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for, “all withheld portions of the additional information submitted by Banco Bradesco on or about May 29, 2020[.]”     Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until July 20, 2020, 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 July 20, 2020, 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."

July 6, 2020

From the Federal Reserve: "Barclays Bank PLC, London, England and Barclays Bank PLC New York Branch, New York, New York Cease and Desist Order, dated May 20, 2015 Terminated June 25, 2020" - but not announced until a full week later on July 2 - why?

June 29, 2020

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

June 22, 2020

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

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

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

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

   What arrogance - commenting amid lockdowns is fine, the OCC is the place to comment, and blockage from account information is fine. The evidentiary hearings and application denial are necessary.

June 15, 2020

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

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

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

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

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

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

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

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

      Meanwhile the Fed is processing and moving to rubber stamp bank expansion applications during the COVID-19 pandemic. The comment periods must be re-opened and other remedies. Watch this site.

June 8, 2020

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

By Matthew R. Lee, Exclusive

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

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

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

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

 Fair Finance Watch is proposing a CRA requirement on all Payroll Protection Program lenders - all of them - and raised this to Congressional leadership. #TreasureCRA. Watch this site.

June 1, 2020

What is the Fed going to do about this?

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

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

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

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

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

The case is In Re: Libor-Based Financial Instruments Antitrust Litigation, 11-md-2262 (Buchwald).

May 25, 2020

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

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

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

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

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

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

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

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

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

   Amid all this, Fair Finance Watch and Inner City Press / Community on the Move are launching a new project. Watch this site.

May 11, 2020

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

By Matthew R. Lee, Exclusive

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

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

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

  Inner City Press has written to the Fed: "This is a FOIA request for the all withheld portions of the additional information submitted by Banco Bradesco on or about May 6, 2020 as part of its challenged but still being processed amid the COVID-19 pandemic to aquire BAC including the exhibits the name of one of which, required to be sent to Fair Finance Watch and Inner City Press under the ex parte rules, was redacted. This follows up on our previous and still outstanding FOIA request which we voluntarily narrowed on April 30 in response to the inquiry by Katrina Allen-Austin of the Legal Division dated the same date. Note: processing of this application should be suspended while lock-down conditions continue in these parts of the US."

May 4, 2020

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

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

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

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

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

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

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

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

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

  Inner City Press will have more on these cases. Watch this site.

April 27, 2020

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

By Matthew R. Lee, Exclusive

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

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

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


If the Fed approves this, it's a joke - public hearings are impossible and it seems illegal, there is no rationale for approving this.

April 20, 2020

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

Federal Reserve Amid Covid 19 Rubber Stamp Prepared For Banco Bradesco Fair Finance Watch Says No

By Matthew R. Lee, Exclusive

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

 Now amid the Coronavirus pandemic, it would appear that the Federal Reserve is still churning forward to try to rubber stamp a bank merger. On April 7 the Fed asked Banco Bradesco's New York law firm to supplement the record with how it is dealing with current economic situation. If the Fed approves this, it's a joke - public hearings are impossible and it seems illegal, there is no rationale for approving this. But: "April 7, 2020

Reena Agarwal Sahni, Esq.
Shearman & Sterling LLP
599 Lexington Avenue
New York, New York 10022
Dear Ms. Sahni:
We refer to the application filed on behalf of Banco Bradesco, S.A., Lecce Holdings
S.A., Fundação Bradesco, BBD Participações S.A., Nova Cidade de Deus Participações S.A.,
and Cidade de Deus Cia. Commercial de Participações, all of Osasco, São Paulo, Brazil, to
become bank holding companies by acquiring substantially all of the shares of BAC Florida
Bank, Coral Gables, Florida, pursuant to Section 3 of the Bank Holding Company Act, as
amended (“BHC Act”).
Based on our review of the current record, the following additional information is
requested. Supporting documentation should be provided, as appropriate.
1. Discuss the impact of current economic conditions on Bradesco’s global operations and
the proposed acquisition of BAC Florida Bank, Coral Gables, Florida. Your response
should include information regarding any changes to the consideration or purchase price
due to changed economic conditions, as well as revised pro forma and projected financial
information, including asset quality and capital ratios, as of the most recent available
reporting period for Banco Bradesco and BAC, and the basis for those revisions.
2. Indicate whether there has been any change in timing regarding planned
consummation.

3. Provide an update on the FDIC’s review of the related Bank Merger Act application.
Please provide your response addressed to the undersigned within twenty business days
of the date of this letter. Any information for which confidential treatment is desired should be so
labeled and separately bound in accordance with Section 261.15 of the Board's Rules Regarding
Availability of Information. In addition, in accordance with the Federal Reserve's ex parte
procedures, provide a copy of the public portion of your response (together with any
attachments) directly to the commenter." These are the only questions the Fed could think of or had? Not, how are the banks serving the impacted public? Fair Finance Watch is proposing a CRA requirement on all Payroll Protection Program lenders - all of them - and raised this to Congressional leadership. #TreasureCRA. Watch this site.

April 6 2020

As Regulators Give Even Volcker Rulers More Time Community Reinvestment Act Comment Period Must Be Extended

By Matthew Russell Lee, Patreon  Periscope
BBC - Decrypt - LightRead - Honduras - Source

BRONX / SDNY, April 2 --   With the Community Reinvestment Act under attack by US Comptroller of the Currency Josephy Otting, Fair Finance Watch and Inner City Press on March 11 submitted a third comment this time making an obvious request.

They ask that in light of Coronavirus / COVID-19 the comment period on the assault on CRA be extended for months. See also here. Though it shouldn't have been necessary, Fair Finance Watch commented again on March 20, noting postponements by SEC and others.

  With Otting even still resisting postponing his dream of weakening the CRA, his OCC has joined not only his sometime partner in crime the FDIC but also the Fed providing a TWO YEAR extension for big banks, while still threatening to push through his attack on CRA, ghoulishly using Coronavirus, see below.

   On April 2, an even more telling move involving the OCC (and the FDIC, Fed and others) - to refuse to extend a comment period, in this case ending April 1, but to say that for those commenting on the Volcker Rule, comments will be considered for at least a month after the "expiration" of the comment period.

  If the OCC and Otting think it would be sufficient or acceptable to wait until April 9 then say Otting will consider (read, shred) comments until May 9, it is not. The communities that need CRA are even more impacted by Coronavirus, in terms of commenting. And the ghoulishness of Otting's assault on CRA, when these communities are struggling more than ever, is clear. Otting has already pushed it to the limit. Postpone or resign. "Five federal financial regulatory agencies on Thursday announced that they will consider comments submitted before May 1, 2020, on their proposal to modify the Volcker rule’s general prohibition on banking entities investing in or sponsoring hedge funds or private equity funds—known as “covered funds.”  The agencies will continue to consider comments to provide interested persons more time to analyze the issues and prepare their comments in light of potential disruptions resulting from the coronavirus. The proposal asked for comments to be submitted by April 1, 2020.  The agencies will continue to work together on policy issues as the coronavirus pandemic unfolds.  Media Contacts: Federal Reserve Board Eric Kollig202-452-2955... OCC Bryan Hubbard202-649-6870."

March 30, 2020

Troubling: Why does the Fed need BlackRock? Parts of the Fed’s bond-buying program fit more squarely in an asset manager’s wheelhouse. While the Fed’s main job is to set big-picture monetary policy by purchasing Treasury debt, a fund firm like BlackRock can be tapped for its expertise in evaluating and managing different kinds of debt, like portfolios of corporate bonds -- something that’s not a main skill set of the central bank. BlackRock Financial Markets Advisory, an arm that consults with government agencies and institutions, will manage the projects. Aladdin, the risk-monitoring software that BlackRock will use in the process, already watches over more than $20 trillion, with a client base including insurers, pensions and fellow asset managers

March 23, 2020

  Given the Coronavirus crisis, how can the Federal Reserve be closing the public comment period on mergers on which public hearings can be requested? We'll have more on this, from Inner City Press and Fair Finance Watch which is also raising the issue to the other bank regulatory agencies.

March 16, 2020

  On March 14 President Trump said of Jerome Powell, I could remove him, or demoted him to regular Governor status and appoint another Chair.

 How long can this go on?

March 9, 2020

  It begins: "After careful consideration of the growing public health concerns associated with the coronavirus (COVID-19), the organizing sponsors of the 2020 National Interagency Community Reinvestment Conference (NICRC), scheduled March 9-12 in Denver, Colorado, have made the decision to postpone the conference.  The Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation jointly made this decision out of an abundance of caution to help safeguard the health and well-being of the more than 1,300 registered conference participants.  The NICRC planning team is working to confirm a date to reschedule the conference as soon as possible later this year. "

March 2, 2020

 Look who's promoting Joe Otting and his assault on CRA, March 10 in Denver: "Esther L. George President and CEO Federal Reserve Bank of Kansas City  introduced by  Jackson Winsett Assistant Vice President and Community Affairs Officer Federal Reserve Bank of Kansas City  Remarks on Modernizing the CRA  Joseph M. Otting Comptroller of  the Currency  introduced by  Barry Wides Deputy Comptroller for Community Affairs Office of the Comptroller of the Currency."

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.

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.

  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.

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.

   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." Watch this site.

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?      

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." We'll have more on this.

August 12, 2019

Capital One Inactive On Hacking 127 Days While Federal Reserve At Amazon Dog and Pony Show

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

On Bangladesh Bank Heist US Federal Reserve Provides Only 1 Page Under FOIA Amid SDNY Case

By Matthew Russell Lee, Patreon

FEDERAL COURTHOUSE, June 29 – 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, see below.

  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. Inner City Press on June 29 submitted an appeal: "Dear Governor in charge of FOIA Appeals:  On behalf of Inner City Press / Fair Finance Watch (ICP), this is a near immediate FOIA appeal of FRB absurd denial by providing only one page, a two paragraph cover letter, in response to Inner City Press' FOIA request four months ago regarding the Federal Reserve's role in and action on the Bangladesh Bank heist      As you must know, agencies are request to provided all reasonably segregable information and are not allow mass withhold, as here. Beyond the Bangladesh Bank, to withhold in full records about the oversight by the Board over the Reserve Bank is an outrage. See also Inner City Press' timely comments on the FRB's current proposals to modify - and weaken - its FOIA responsibilities.   

We requested and request: records regarding the Federal Reserve System's [role] including the FRBNY's role in what is known as the Bangladesh Bank hack or cyber heist and assistance provided to Bangladesh Bank and investigative authorities since the heist, including but limited to in connection with the SDNY case Bangladesh Bank v Rizal Commercial Banking Corp et al, U.S. District Court, Southern District of New York, No. 19-00983.  and, for the record, from Inner City Press' May 21 submission: " First, the FRB denied the request for expedited processing, finding no threat of physical harm (??) and also reciting and presumably denying under this standard:     "[t]he requester is a representative of the news media ... and there is urgency to inform the public concerning actual or alleged Board activity.”     Still, the Fed in further extending its time said there would be response by April 2. There has been none, nothing at all.   Today in the SDNY counsel for Bangladesh Bank directly referred to the Federal Reserve. The Fed's delay, contrasted to the fast if bad faith turn around on Inner City Press' BB&T money laundering enforcement action termination FOIA, is in this context unacceptable, even a cover up.    This is an appeal. The FRB should provide an explanation of nothing since April 2, and the long ago requested documents."    Inner City Press is hereby appealing from the withholding, demanding that all segregable information be provided, immediately." Watch this site.

June 24, 2019

Four days after Inner City Press submitted its FOIA comment to the Fed, they robo-acknowledged it:

"Thank you for commenting on the Board's recent proposal. Your views will be helpful to the Board in its consideration of this matter    Office of the Secretary  Board of Governors of the Federal Reserve System "

June 17, 2019

Federal Reserve Proposes Weakening Its Duties Under FOIA As Withholds Docs on Mergers and Bangladesh Bank

By Matthew Russell Lee

SOUTH BRONX, SDNY COURT, June 15 – The U.S. Federal Reserve Board, while 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

Incorporated by reference along with underlying request(s) in the FRB's possession: 

From: Matthew R. Lee, Inner City Press Date: Tue, May 21, 2019 at 2:05 PM Subject: FOIA appeal of FRB's constructive denial of Feb 17 FOIA request about Bangladesh Bank, nothing since April 2, SDNY today

May 21, 2019 

FRB Governor covering FOIA appeals: Information Disclosure Section, Board of Governors of the Federal Reserve 20th & Constitution Avenue, NW, Washington, DC 20551  FOIA APPEAL of constructive denial of FOIA Request No. F-2019-00095  Dear FRB Governor covering FOIA appeals:   This is an appeal of what is now the constructive denial of Inner City Press' and my Feb 17, 2019 FOIA request for "records regarding the Federal Reserve System's [role] including the FRBNY's role in what is known as the Bangladesh Bank hack or cyber heist and assistance provided to Bangladesh Bank and investigative authorities since the heist, including but limited to in connection with the SDNY case Bangladesh Bank v Rizal Commercial Banking Corp et al, U.S. District Court, Southern District of New York, No. 19-00983."    First, the FRB denied the request for expedited processing, finding no threat of physical harm (??) and also reciting and presumably denying under this standard:     "[t]he requester is a representative of the news media ... and there is urgency to inform the public concerning actual or alleged Board activity.”    Still, the Fed in further extending its time said there would be response by April 2. There has been none, nothing at all.   Today in the SDNY counsel for Bangladesh Bank directly referred to the Federal Reserve. The Fed's delay, contrasted to the fast if bad faith turn around on Inner City Press' BB&T money laundering enforcement action termination FOIA, is in this context unacceptable, even a cover up.    This is an appeal. The FRB should provide an explanation of nothing since April 2, and the long ago requested documents.  Please confirm receipt, thank you in advance, 

Matthew Lee, Inner City Press/Fair Finance Watch"

No response at all three weeks later from the FRB.

June 10, 2019

Barclays Withdraws Cayman Islands Bid For Federal Reserve Approval Inner City Press Opposed and Reports

By Matthew R. Lee, Patreon

NEW YORK CITY, May 30 – Barclays applied to the U.S. Federal Reserve in early 2018 for regulatory approval for a Cayman Islands holding company to become the parent of its U.S. bank. Inner City Press / Fair Finance Watch, as dubious then as now about such moves, requested documents and a delay or denial of the proposal.

 Now on May 29, 2019, fifteen months later, the Federal Reserve has informed Inner City Press that Barclays has "withdrawn" its Cayman Islands application.  Federal Reserve's May 29 Barclays letter and more on Patreon, here.

This comes, for example, the day after a proceeding in the U.S. District Court for the Southern District of New York in the first U.S. Panama Papers prosecution, which Inner City Press attended and reported on here, and amid renewed focus on the activities of non U.S. banks like Deutsche Bank in the US.  Here's from Inner City Press' 16 February 2018 filing with the Federal Reserve: "Dear Chair Powell, Secretary Misback and others in the FRS:  This is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Applications of Barclays PLC and Barclays US Holdings Ltd., organized under the laws of the Cayman Islands to acquire Barclays Bank.  It is noteworthy that on the very final day of the comment period of this Barclays Bank Cayman Islands application, the Federal Reserve has announced “The Federal Reserve Board on Friday announced that it is seeking to permanently bar Peter Little, the former head of the foreign exchange (FX) spot desk at Barclays Bank PLC in New York, from employment in the banking industry and to impose a $487,500 fine on him. Little is alleged to have engaged in unsafe and unsound practices by using electronic chat rooms to coordinate with traders at competitor banks to influence FX pricing benchmarks and by engaging in manipulative trading. Little is also alleged to have failed to adequately supervise subordinate traders at Barclays who coordinated with and disclosed confidential information to competitors on Little's behalf.”  Those problems are about the institution, which is here applying to interpose a Cayman Islands subsidiary. Is this to evade taxes? To evade disclosure?  Barclays is associated with using tax havens to avoid taxes: for example in Ireland paying a mere 2%, versus a statutory rate of 12%.

June 3, 2019

Bangladesh Bank Heist Case Hits Jurisdiction and Forum Questions In SDNY As Briefs Due June 14

By Matthew Russell Lee, Patreon

FEDERAL COURTHOUSE, May 21 – 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, and at it SDNY Judge Lorna G. Schofield expressed serious concern if she has subject matter jurisdiction.

  Judge Schofield encouraged the defendants to jointly file two briefs supporting a motion to dismiss by June 14. The first is to be on subject matter jurisdiction, the second on "forum non conveniens." 

  Rizal Commercial Banking Corp (RCBC), through its counsel Tai-Heng Cheng of Sidley Austin on May 21 marveled that Bangladesh Bank has still not succeeded with service of process of the complaint - actually handing the document to those charged, in essence - for example failing to use a sheriff under provisions of Philippines law.

  There also remain questions about service on the other named defendants, one of whom (Mr. Go) is now deceased. The others include: "MAIA SANTOS DEGUITO, ANGELA RUTH TORRES, LORENZO V. TAN, RAUL VICTOR B. TAN, ISMAEL S. REYES, BRIGITTE R. CAPIÑA, NESTOR O. PINEDA, ROMUALDO S. AGARRADO, PHILREM SERVICE CORP., SALUD BAUTISTA, MICHAEL BAUTISTA, CENTURYTEX TRADING, WILLIAM SO GO, BLOOMBERRY RESORTS AND HOTELS, INC. D/B/A SOLAIRE RESORT & CASINO [represented on May 21 by Daniel M. Perry of Milbank], EASTERN HAWAII LEISURE COMPANY, LTD. D/B/A MIDAS HOTEL & CASINO, KAM SIN WONG A/K/A KIM WONG, WEIKANG XU, DING ZHIZE, GAO SHUHUA, and JOHN DOES 1-25." 

  Judge Schofield encouraged Bangladesh Bank to try to perfect service, but remained focused on whether she and the SDNY court havesubject matter jurisdiction. She asked, as to the RICO claim in the complaint, when the alleged conspiracy began and ended. Bangladesh Bank's response referred to US government complaints, including in the U.S. District Court for the District of Central California, against North Korea for the SONY hack in 2014.

   Afterward Inner City Press asked Bangladesh Bank's lead lawyer, John J. Sullivan of Cozen O'Connor, if he had been surprised by Judge Schofield's approach. He said he had expected it, and argued that the judge is considering whether the case is best placed in Federal court or New York State Supreme Court on the other side of Pearl Street. 

  Inner City Press asked him, Doesn't forum non conveniens in this case point to the Philippines? And why hasn't Bangladesh Bank also sued North Korea? Sullivan said he was not at liberty to answer. We'll have more on this - for now, more on Patreon, here.    Inner City Press has appealed the Fed's constructive denial of its FOIA request on this - without response...

May 27, 2019

The Fed terminates enforcement actions so that banks can do mergers, like BB&T and now this:

May 23, 2019  Federal Reserve Board announces termination of enforcement actions For release at 11:00 a.m. EDT  Share The Federal Reserve Board on Thursday announced the termination of the enforcement actions listed below:  Fulton Financial Corporation, Lancaster, Pennsylvania, and Lafayette Ambassador Bank, Bethlehem, Pennsylvania Cease and Desist Order, dated September 4, 2014 (PDF) Terminated May 20, 2019  United Bank Limited, Karachi, Pakistan and United Bank Limited, New York Branch, New York, New York Written Agreement, dated July 2, 2018 (PDF) Terminated May 20, 2019

But the Fed refuses, even when FOIA-ed, to say why...

May 20, 2019

Last week Governor Quarles told the Senate Banking Committee about the two public meeting - he called them hearings, which they were not - the Fed has held on BB&T / Suntrust. But the banks have not even responded to written comments, much less on BB&T AML violations. Watch this site.

May 13, 2019

How cozy is the Fed with its former senior lawyers? This week Inner City Press belatedly received a partial FOIA response to a request from last year about Cadence Bank - and Pat Robinson of Wachtel Lipton asked Alison Thro to meet about the merger and the response, including location, is redacted as "private."...We'll have more on this.

May 6, 2019

As Federal Reserve Rubber Stamps Mergers Covering For BB&T At Least No More Moore

By Matthew R. Lee, Video, story, FOIA docs

SOUTH BRONX,  May 2 – Federal Reserve Board chairman Jay Powell told Congress he will run transparent reviews of mergers like BB&T - Suntrust, and announced two public hearings as if to prove it. But on February 27 while still not acting on Inner City Press' Freedom of Information Act request for withheld information, his Fed Board rubber stamped the application by WSFS to buy Beneficial and close at least 25 branches. Until May 2 the Fed has directly portended to become even more of a rubber stamp, with the now withdrawn nomination to the Board of Stephen Moore, even after his characterization as "armpits" of  Cleveland - host to the Federal Reserve Bank of Cleveland - and Cincinnati. Moore said it was due to stress on is family but earlier on May 2 was bragging to finance reporters that he would go forward. No more. (No Moore).

  But the Federal Reserve remains problematic. It has only today an hour after Moore's nomination ended produced only a single page of the "all records" Inner City Press has requested under the Freedom of Information Act about the Fed's dubious decision to terminate its money laundering enforcement order against BB&T just before the comment period on its proposed merger with Suntrust is set to expire on May 3. We'll have more on this.

  Nomination post-mortem: apparently in an attempt to keep his candidacy alive, Moore appeared without taking audience questions on the Brian Lehrer radio show on WNYC in New York on Sunday APril 28 appeared on ABC This Week. He was not asked about his substantive anti-CRA views, but was asked about his writing on gender and the closing the pay gap might be disruptive to the family. His evasive answer was about the current economy. Will it work? Senator Susan Collins was cited. We'll have more on this.

  On April 22, Herman Cain was out of the running. Opposition to Cain's nomination grew include four Republican Senators: Sens. Kevin Cramer of North Dakota, Lisa Murkowski of Alaska, Mitt Romney of Utah, and according to many, Cory Gardner of Colorado.  Now on April 22 Trump said Monday that he would not nominate Herman Cain to the Federal Reserve after the former GOP presidential candidate asked him not to.  Senate Republicans had warned the White House against naming the businessman and 2012 presidential hopeful to serve on the body's board of governors.   "My friend Herman Cain, a truly wonderful man, has asked me not to nominate him for a seat on the Federal Reserve Board," Trump tweeted. "I will respect his wishes. Herman is a great American who truly loves our Country!"  But it is still important to note that the Fed's own fraud in its Reserve Bank directors has been highlighted by Cain's nomination: from 1992 to 1996, Cain served as a director of the Federal Reserve Bank of Kansas City. Why? The Fed can be a fraud, as it is proving on FOIA.

April 29, 2019

While Sumitomo stands accused of discrimination and retaliation in the SDNY, the FRBNY a few blocks south settles on the cheap: "WHEREAS, on April 23, 2019, the board of directors of the Bank, at a duly constituted meeting, adopted a resolution authorizing and directing Mr. Masahiko Oshima and Mr. Nobuyuki Kawabata to enter into this Written Agreement (the “Agreement”) on behalf of the Bank and the Branch, respectively, and consenting to compliance with each and every provision of this Agreement by the Bank and the Branch. NOW, THEREFORE, the Reserve Bank, the Bank, and the Branch hereby agree as follows: Corporate Governance and Management Oversight 1. Within 60 days of this Agreement, the Bank’s board of directors and the Branch’s management shall jointly submit a written plan to enhance oversight, by the management of the Bank and Branch, of the Branch’s compliance with the BSA/AML Requirements and the OFAC Regulations acceptable to the Reserve Bank." Inner City Press will have more on this.

April 22, 2019

As BB&T Tries Taking Over Suntrust Fed Lifts Enforcement Action But Named in SDNY Inner City Press Will Raise

By Matthew R. Lee, FOIA docs

NEW YORK CITY, April 19 – When BB&T announced a $66 billion proposal to take over Suntrust Bank, which would close a still undisclosed number of branches and extend BB&T disparate lending patterns, 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.


 this: "The Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) on Thursday announced that they will jointly hold two public meetings on the proposed merger of BB&T Corporation, Winston-Salem, North Carolina, with SunTrust Banks, Inc., Atlanta, Georgia. As part of the proposal, BB&T would merge SunTrust Bank with and into its subsidiary state non-member bank, Branch Banking and Trust Company, Winston-Salem, North Carolina.  The purpose of the meetings is to collect information relating to the convenience and needs of the communities to be served, including a review of the insured depository institutions' performance under the Community Reinvestment Act. The agencies also will consider and collect information on other factors relevant to making a decision on the application, including the effects of the proposal on the stability of the U.S. banking or financial system, the financial and managerial resources and future prospects of the companies, and competition in the relevant markets.  The first public meeting will be held:  Thursday, April 25 at 8:30 a.m., EDT Charlotte Branch of the Federal Reserve Bank of Richmond 530 East Trade Street, Charlotte, North Carolina The second public meeting will be held:  Friday, May 3, at 8:30 a.m., EDT Federal Reserve Bank of Atlanta 1000 Peachtree Street N.E., Atlanta, Georgia. All persons wishing to testify at the public meeting in Charlotte should submit a written request no later than 5:00 p.m. EDT on Monday, April 15, 2019. A request to testify at the Charlotte public meeting may be sent by mail to: Matthew Martin, Vice President, Research Department, Microeconomics and Research Communications, Federal Reserve Bank of Richmond, 530 East Trade Street, Charlotte, North Carolina, 28202; by online form at: the Charlotte Public Meeting Request Form; by e-mail to: publicmeeting.charlotte@rich.frb.org; or by facsimile: 704-358-2300.  All persons wishing to testify at the public meeting in Atlanta should submit a written request no later than 5:00 p.m. EDT on Tuesday, April 23, 2019. A request to testify at the Atlanta public meeting may be sent by mail to: Karen Leone de Nie, Vice President Community and Economic Development, Federal Reserve Bank of Atlanta, 1000 Peachtree Street N.E., Atlanta, Georgia, 30309; by online form at: Atlanta Public Meeting Request Form; by e-mail to: atlfedcomdev@atl.frb.org." Game on.

April 15, 2019

  This has been filed: "Dear Chair Powell, Secretary Misback, others in FRB:    This is a request for a full copy of, and a timely first comment on, the Applications of Chemical Financial Corporation, Detroit, Michigan to merge with TCF Financial Corporation and thereby indirectly acquire TCF National Bank.

 ...Chemical Bank in 2017 in the Detroit MSA to which the two banks seek to move their headquarters denied the home purchase loan applications of African Americans more than FOUR TIMES more frequently than those of whites, much worse even than the rest of the industry. This is true even though Chemical Bank reported, for conventional home purchase loans, zero denials for African Americans, presumptively not credible on 51 applications. Inner City Press / Fair Finance Watch is timely requesting an evidentiary hearing. 

Also, prior the requested hearing and for the record, note that A TCF Financial Corp. shareholder has accused the company and its board of violating securities laws through misleading regulatory filings ahead of its proposed merger with Chemical Financial Corp.  TCF and its executives omitted key information, including financial projections for both companies and the raw data underlying them, from registration statements they filed with the Securities Exchange Commission urging shareholders to approve the deal, according to the April 9 complaint filed in Delaware federal court.

  The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved.   Inner City Press notes that the FRB web site while listing email addressed to submit comments and information requests to some Reserve Banks does not include such information for the Chicago Fed: why not?" Watch this site.

April 8, 2019

As Federal Reserve Rubber Stamps Mergers Nominee Herman Cain Can Cites KC Fed Service

By Matthew R. Lee, Video, story, FOIA docs

SOUTH BRONX,  April 5 – Federal Reserve Board chairman Jay Powell told Congress he will run transparent reviews of mergers like BB&T - Suntrust, and announced two public hearings as if to prove it. But on February 27 while still not acting on Inner City Press' Freedom of Information Act request for withheld information, his Fed Board rubber stamped the application by WSFS to buy Beneficial and close at least 25 branches. Now the Fed portends to become even more of a rubber stamp, even more dismissive of the Community Reinvestment Act, now that not only Stephen Moore, but also Herman Cain, have been nominated. While expecting opposition to Cain to grow, legitimately and from within the Deep State, it is important to note that the Fed's own fraud in its Reserve Bank directors is highlighted by Cain's nomination: from 1992 to 1996, Cain served as a director of the Federal Reserve Bank of Kansas City. Why? And now that will be cited as his qualification. The Fed can be a fraud, as it is proving on FOIA. As to Moore, beyond his article trashing the CRA, here, Moore has been outed for using false data such that even the Kansas City Star said they won't publish him any more. But he'd be in on FRB merger approval orders? As pointed out, Moore previously urged people to burn their Social Security cards and refuse to pay into the system, video here.

April 1, 2019

As Federal Reserve Rubber Stamps Mergers Ex Gov Kohn Slaps Anti CRA Nominee Stephen Moore

By Matthew R. Lee, Video, story, FOIA docs

SOUTH BRONX, March 29 – Federal Reserve Board chairman Jay Powell told Congress he will run transparent reviews of mergers like BB&T - Suntrust, and announced two public hearings as if to prove it. But on February 27 while still not acting on Inner City Press' Freedom of Information Act request for withheld information, his Fed Board rubber stamped the application by WSFS to buy Beneficial and close at least 25 branches. Now the Fed portends to become even more of a rubber stamp, even more dismissive of the Community Reinvestment Act, now that Stephen Moore has been nominated. Beyond his article trashing the CRA, here, Moore has been outed for using false data such that even the Kansas City Star said they won't publish him any more. But he'd be in on FRB merger approval orders? Ex Governor Donald L. Kohn, who was there when the Fed approved acquisitions without any comment periods (Inner City Press coverage here) has slapped back on Moore, which some might ascribe to the Deep State, like Reuters regardless of how bad Moore is. Moore wrote that the Fed "should take a page from the playbook of Paul Volcker, the former Fed chairman who battled back rampant inflation in the early 1980s. According to Moore, Volcker's success was rooted in his use of a commodity-price rule that prompted the Fed to lift interest rates when commodity prices were rising and cut them when they were falling.  One problem: It appears Volcker and the Fed never used such a system.  In the 1980s 'there was some discussion of this and some board members paid some attention to commodity prices,' Donald Kohn, a Fed staffer through most of Volcker's tenure and eventually a vice chair of the Fed himself, said. 'But it did not play a central role.'" But how many mergers did Kohn himself rubber stamp? What questions did he ask about predatory lending? Now it emerges that Moore still owes $75,000 in back taxes from 2014.   Records in the Circuit Court of Maryland's Montgomery County reflect that on Jan. 29, 2018, the U.S. government obtained a lien against Moore in the amount of $75,328.80 for the 2014 filing year. Inner City Press this week witnessed a Florida businessman sentenced to 30 months in jail for tax fraud in the U.S. District Court for the Southern District of New York by SDNY Judge Ronnie Abrams, a month after art gallery owner Mary Boone got a similar sentence. Troublingly, before the Moore tax lien news emerged, Sen. Tim Scott (R-SC) has said of Moore, "Very intelligent guy, certainly has had some provocative comments in the past. But having known him for a while, I think he will serve well. I think separating the rhetoric as a commentator from an actual member of the Federal Reserve, you’ll find him to be a very astute, contemplative thinker who has the ability to add value to the board.” How? This Moore quote, after the nomination, should disqualify him: "I’m kind of new to this game, frankly, so I’m going to be on a steep learning curve myself about how the Fed operates, how the Federal Reserve makes its decisions. It’s hard for me to say even what my role will be there, assuming I get confirmed.” Even Greg Mankiw,  an adviser to George W. Bush and Mitt Romney in his 2012 presidential run has come out against Moore, writing that Senators should "do their job" and ensure Moore is not named as a Fed governor.   "Steve is a perfectly amiable guy, but he does not have the intellectual gravitas for this important job," Mankiw said. "It is time for Senators to do their job. Mr. Moore should not be confirmed." We'll have more on this. March 25, 2019

On SDNY Bangladesh Bank Heist Case Federal Reserve Delays to April 2 FOIA Response to  Inner City Press

By Matthew Russell Lee

FEDERAL COURTHOUSE, March 23 – 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. Now the first pre-trial conference in the case has been set, for 2 April 2019 before SDNY Judge Lorna G. Schofield. Inner City Press will be there.


To the Federal Reserve, Inner City Press requested records relating to the Fed's role with response officially due in 20 working days. But now this from the Federal Reserve: "Re:       Freedom of Information Act Request No. F-2019-00095     Dear Mr. Lee,     On February 19, 2019, the Board of Governors (“Board”) received your electronic message dated February 17, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for records regarding the Federal Reserve System's [role] including the FRBNY's role in what is known as the Bangladesh Bank hack or cyber heist and assistance provided to Bangladesh Bank and investigative authorities since the heist, including but limited to in connection with the SDNY case Bangladesh Bank v Rizal Commercial Banking Corp et al, U.S. District Court, Southern District of New York, No. 19-00983.      Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until April 2, 2019, 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 April 2, 2019, 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." And April 2 is the day of the SDNY hearing. We'll have more on this.

In Dhaka, the Criminal Investigation Department which failed to submit its probe report into the heist on time has now been ordered by Metropolitan Magistrate Sadbir Yasir Ahsan Chowdhury to do so by March 13 in Bangladesh Bank cyber heist case.

In the U.S. District Court for Central California, the unsealed criminal complaint against Park Jin Hyuk lists four email addresses involved in spear-phishing Bangladesh Bank and among others an unnamed "African Bank;" one of these addresses is said to also have communicated with an individual in Australia about importing commodities to North Korea in violations of UN sanctions.

In the SDNY, the case is Bangladesh Bank v Rizal Commercial Banking Corp et al, U.S. District Court, Southern District of New York, No. 19-00983.

March 18, 2019

Federal Reserve Governor Lael Brainard response to Inner City Press question on information blacked up and no FOIA ruling until after the Fed has approved merger applications: "I certainly can say we will follow up. Generally speaking as I said earlier we think one of the unique and valuable aspects of the CRA is its public nature. That we as examiners and regulators are directed to make ratings and underlying analysis public. And we certainly are looking for ways to have more public input so that we have richer information on performance context, on activities. That public aspect of the CRA is extraordinarily valuable and is one of the things that provides oxygen to that community development ecosystem that I was talking about earlier."

We'll have more on this...

March 11, 2019

As BB&T Tries Taking Over Suntrust Its Susquehanna Abuses Lead To Fine Disparate Lending To Be Raised

By Matthew R. Lee, FOIA docs

SOUTH BRONX, March 6 – When BB&T announced a $66 billion proposal to take over Suntrust Bank, which would close a still undisclosed number of branches and extend BB&T disparate lending patterns, many linked it to deregulatory moves in Washington. These include an assault on the Community Reinvestment Act, being led by Comptroller of the Currency Joseph Otting, who while at OneWest Bank led a false commenting process to push through a merger with CIT Group. (Otting is trying to change the OCC's practices on FOIA fee waivers and is even refusing to consider comments on some Business Combinations. But this BB&T proposal will go to the Fed whose Jerome Powell has vowed, credibly or not, to conduct a full review. And so consider this:  BB&T has been ordered to return $5.2 million to investors, according to the Securities and Exchange Commission, over charges it it acquired misled clients about the cost of advisory services.  The SEC said the firm that BB&T acquired with Susquehanna Bancshares, known then as Valley Forge Asset Management, misled about 1,200 clients into believing they were receiving full service brokerage services at a discount. We'll have more on this.

 Fair Finance Watch, which has been tracking BB&T as well as Otting's and the Federal Reserve's anti-CRA moves, finds that for example in the Atlanta Metropolitan Statistical Area in 2017 BB&T denied the home purchase mortgage applications of African Americans 2.2 times more frequently than whites, while making only 50 such loans to African Americans, and 23 to Latinos, compared to 458 to whites, all more disparate that other lenders in the market.

  While some portray the proposed merger as a fait accompli, the Fed and OCC must hold public comment periods and consider the banks' CRA records, even as they race to undermine the law. Inner City Press will submit requests under the Freedom of Information ActMarch 4, 2019

In DC Federal Reserve Powell Spins Rubber Stamp Of WSFS Merger Bad Omen on Suntrust

By Matthew R. Lee, Video, story, FOIA docs

SOUTH BRONX, February 27 – Federal Reserve Board chairman Jay Powell told Congress he will run transparent reviews of mergers like BB&T - Suntrust. But on February 27 while still not acting on Inner City Press' Freedom of Information Act request for withheld information, his Fed Board rubber stamped the application by WSFS to buy Beneficial and close at least 25 branches. This was announced online at 3 pm, with a phone message to Fair Finance Watch which protested the deal an hour later. On Capitol Hill Fed chairman Jay Powell was asked, "could you share the criteria that the Fed uses in evaluating bank merger applications?          POWELL:  I'd be glad to. So, it's -- it's quite detailed. There's a -- there's a Federal Reserve section that lays out a lot of detail. And there's also plenty of guidance on -- on that issue. Actually, I -- I have a picture of it here. So, we look at competitive factors, making community factors, managerial resources.          We -- we look at compliance with consumer and fair lending laws and CRA record and that kind of thing. We look at the combined financials of course of the two companies. We also invite public comment.          We have -- we have a pretty thoroughly carefully worked out process. We go through this process carefully for -- for mergers. And look at all those factors and then make a decision." Really? His WSFS order says, "A commenter objected to the proposal alleging, based on data reported under the Home Mortgage Disclosure Act (“HMDA”)25 for 2017, that WSFS Bank denied home purchase mortgage loans to African American and Latino applicants at significantly higher rates than to white applicants in the Wilmington, DelawareMaryland-New Jersey Metropolitan Division (“MD”) and the Salisbury, MarylandDelaware Metropolitan Statistical Area (“MSA”). The commenter also raised concerns regarding branch closures anticipated in connection with the proposed mergers." The comment, which the Fed seems not to want to name in order to try to deny legal standing, is Fair Finance Watch / Inner City Press.
The Fed wrote, "On January 15, 2019, the Board of Governors (“Board”) received your electronic message dated January 15, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for all withheld and redacted portions of the submissions by WSFS to the FRS to acquire Beneficial, including but not limited to the absurdly withheld answer to FRB Question 8 about the Community Reinvestme[nt] Act.      Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until February 28, 2019, in order to consult with two or more components of the Board having a substantial interest in the determination of the request." And the day before that extension, the Fed rubber stamped the application. We'll have more on this.

February 25, 2019

  Here's from the Fed: "This is in reference to your email dated February 17, 2019, and received by the Board's Freedom of Information Office on February 19. Pursuant to the Freedom of Information Act (“FOIA"), 5 U.S.C. $ 552, you request:  records regarding the Federal Reserve System's [role] including the FRBNY's role in what is known as the Bangladesh Bank hack or cyber heist and assistance provided to Bangladesh Bank and investigative authorities since the heist, including but limited to in connection with the SDNY case Bangladesh Bank v Rizal Commercial Banking Corp et al, U.S. District Court, Southern District of New York, No. 19-00983.  You have requested expedited treatment for your request. The Board's Rules Regarding Availability of Information ("Board's Rules") require a requester to "demonstrate a compelling need for expedited processing." The Board's Rules provide two methods by which this need may be demonstrated. One requires a showing that "[t]he requester is a representative of the news media ... and there is urgency to inform the public concerning actual or alleged Board activity.” The other requires a showing that “[t]he failure to obtain the records on an expedited basis could reasonably be expected to pose an imminent threat to the life or physical safety of an individual.” 12 C.F.R. § 261.13(c).  There is nothing in your letter suggesting that there is a compelling need to inform the public on this topic." So the theft of $81 million using the Federal Reserve, there's no compelling need to inform the public?

February 18, 2019
Filed: This is a FOIA request for record regarding the Federal Reserve System's including the FRBNY's role in what is known as the Bangladesh Bank hack or cyber heist and assistance provided to Bangladesh Bank and investigative authorities since the heist, including but limited to in connection with the SDNY case  Bangladesh Bank v Rizal Commercial Banking Corp et al, U.S. District Court, Southern District of New York, No. 19-00983

February 11, 2019

Clearing the decks to try to rubber stamp? The Federal Reserve Board on February 7 announced the execution of the enforcement action listed below:  Consent Prohibition against Alison Keefe, former employee of SunTrust Bank, Atlanta, Georgia, for violating bank overdraft policies for her own benefit. And there's the proposed BB&T merger...

February 4, 2019

To Federal Reserve Cadence Bank Redacted 80% of Letter Now Fed Extends Time To Unredact Any Of It

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

SOUTH BRONX, January 29 – 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. Now a new low: 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. When it arrived, as intended after the Fed's rubber stamp approva, the letter was more than 80% redacted, arguing for a fast approval. This is a new low, and something we will be confronting and combating in 2019. We have begun with this new FOIA request: "This is a FOIA request for the all withheld and redacted portions of the submissions by Cadence to the FRS to acquire State Bank, including but not limited to the outrageously 80% redacted Nov 1, 2018 letter which Cadence' counsel, rather than emailing to us, sent by mail, one and then twice, the second on Dec 14 AFTER the Fed approved the merger. In this connection we are also request any and all FRB records concerning this and all other Cadence submissions in the last year, and any records reflecting regulatory disciplining by the Fed of banks or BHCs for withholding information in bad faith, for the past three years. Each portions of this request can be considered separately so as to ensure receipt as fast as possible of the unredacted, wrongfully delayed Nov 1, 2018 letter." But now on January 29 the Fed extends its time even further past its approval: "January 29, 2019      Mr. Matthew R. Lee  Inner City Press / Fair Finance Watch  PO Box 20047  Dag Hammarskjold Station  New York, NY 10017     Re:       Freedom of Information Act Request No. F-2019-00053     Dear Mr. Lee,     On December 28, 2018, the Board of Governors (“Board”) received your electronic message dated December 28, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for all withheld and redacted portions of the submissions by Cadence to the FRS to acquire State Bank, including but not limited to the outrageously 80% redacted Nov. 1, 2018 letter; and any and all FRB records concerning this and all other Cadence submissions in the last year, and any records reflecting regulatory disciplining by the Fed of banks or BHCs for withholding information in bad faith, for the past three years.     Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until February 12, 2019, 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 February 12, 2019, 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.     Thank you,     Freedom of Information Office  Board of Governors of the Federal Reserve System." No thanks.

January 28, 2019

 Just how much of a rubber stamp has the Fed become? Inner City Press / Fair Finance Watch timely requested an extension of the Fed's comment period on CenterState Bank - NCC. The Fed's Deputy Secretary nearly automatically denied it in a letter dated January 15, saying that ICP has only until January 21 to comment. But the letter was never emailed to Inner City Press, instead sent by snail mail that arrived AFTER the January 21 deadline. Is it any wonder that a certain law firm, flush with former Fed lawyers, is bragging about how easy it is getting for them at the Fed? We'll have more on this.

January 21, 2019

Amid Targeting of Community Reinvestment Act Fed Delays on FOIA for WSFS No Notices Since Dec 21

By Matthew R. Lee, Video, story, FOIA docs

SOUTH BRONX, January 15 – The US Treasury Department is the next stage of a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. The protagonist, akin to Scott Pruitt when he was at the US Environmental Protection Agency or Ryan Zinke at Interior, is Comptroller of the Current Joseph Otting. On September 12 Fair Finance Watch (and on FOIA, Inner City Press) commented to the OCC, here. At the November 19 deadline, not yet posted was Inner City Press' November 17 fourth comment, just as Otting's OCC absurdly waited 13 days to try to rule it does not have to consider Fair Finance Watch's comments on WSFS Bank's application to acquire Beneficial. Now, after the OCC gleefully closed its comment period on that, WSFS on December 13 announced it will close 25 branches. One would think Otting would have to re-open the comment period. But that's not how Otting rolls. And the Fed, on FOIA and now public notice, is absurd. It has allowed WSFS to withhold its answer on CRA, in a letter it sent late to Inner City Press, while on January 15 the most recent H2A list of applications the public has 30 days to comment on is dated December 21 - nearly 30 days old. And this is not due to the shutdown - the Fed h as its own money. Inner City Press on January 15 submitted: "a FOIA request for all withheld and redacted portions of the submissions by WSFS to the FRS to acquire Beneficial, including but not limited to the absurdly withheld answer to FRB Question 8 about the Community Reinvestment Act ("See Confidential Exhibit 7") in the supposedly New Years Day letter by WSFS which was not emailed to us but rather put in the mail, a week later. (In light of the absuridity we are challenging all withholdings.) In this connection we are also request any and all FRB records concerning this and all other WSFS submissions in the last year, and any records reflecting regulatory disciplining by the Fed of banks or BHCs for withholding information in bad faith, for the past three years. Each portions of this request can be considered separately so as to ensure receipt as fast as possible of wrongfully withheld information so we can comment on it."

January 14, 2019

Amid Targeting of Community Reinvestment Act Centerstate Bank NCC Takeover and Withholding Challenged on Disparate Lending

By Matthew R. Lee, Video, story, FOIA docs

NEW YORK CITY, January 11 – The US Treasury Department is the next stage of a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. On January 7, Fair Finance Watch and Inner City Press filed comments and a Freedom of Information Act request with the Federal Reserve on Centerstate Bank's application to acquire National Bank of Commerce, despite Centerstate's disparate lending record, see below. On January 11, having been sent documents showing that Centerstate is trying to withhold most of its exhibits, Inner City Press filed "This is a second timely comment on the over-withheld Applications of Centerstate Bank Corporation, Winter Haven, Florida to merge with National Commerce Corporation, and thereby indirectly acquire National Bank of Commerce.    On January 7 Inner City Press / Fair Finance Watch submitted an initial comment and requested a copy of the full Application, under FOIA and through the Reserve Bank. So far, what has been sent to Inner City Press has no portion at all of the only substantive Exhibits, B, C and D. The only Exhibits provided are the merger agreements and the form of newspaper notice.  This is an abuse, and the comment period must be extended so that comment on the wrongfully withheld exhibits can be made. It is impossible to believe that there are no segregable non exempt portions of those exhibits. Inner City Press already has a FOIA request pending and so is not confusing the matter by submitting another FOIA request.  The FRB should not countenance such strategic secrecy by this applicant. This is a specific timely request that the comment period be extended and the information provided.

January 7, 2019

As Federal Reserve Chair Powell Says Would Not Resign If Asked Contrast to FOIA Denials and Merger Rubber Stamping

By Matthew R. Lee, Video, story, FOIA docs

NEW YORK CITY, January 4 – Today Federal Reserve Board Chairman Jerome Powell said he would not resign from his post if asked by President Donald Trump. He said this in response to a question at an American Economic Association event in Atlanta. It sounds transparent - but his Federal Reserve, at least on complying with the Freedom of Information Act (FOIA), is not transparent. And Powell was the Governor in charge of denying the Press' FOIA appeals, which he did time after time. The context: the US Treasury Department is the next stage of a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. The protagonist, akin to Scott Pruitt when he was at the US Environmental Protection Agency or Ryan Zinke at Interior, is Comptroller of the Current Joseph Otting. On September 12 Fair Finance Watch (and on FOIA, Inner City Press) commented to the OCC, here. At the November 19 deadline, not yet posted was Inner City Press' November 17 fourth comment, just as Otting's OCC absurdly waited 13 days to try to rule it does not have to consider Fair Finance Watch's comments on WSFS Bank's application to acquire Beneficial. Now, after the OCC gleefully closed its comment period on that, WSFS on December 13 announced it will close 25 branches. One would think Otting would have to re-open the comment period. But that's not how Otting rolls. And the Fed, on FOIA, is absurd. On January 2 the Federal Reserve unilaterally extended its time to respond to Inner City Press' FOIA request about WSFS and CRA - without any commitment to no haul off and rubber stamp the application. Here's what the Fed wrote: "Mr. Matthew R. Lee  Inner City Press  P.O. Box 20047  Dag Hammarskjold Station  New York, NY 10017     Re:       Freedom of Information Act Request No. F-2019-00040     Dear Mr. Lee,     On December 3, 2018, the Board of Governors (“Board”) received your electronic message dated December 1, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for all withheld portions of the applications by WSFS to acquire Beneficial, including but not limited to presumptively mis-labeled “Confidential” exhibits about WSFS's CRA program (“Confidential” Exhibit 9)... Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until January 16, 2019, in order to consult with two or more components of the Board having a substantial interest in the determination of the request.     If a determination can be made before January 16, 2019, 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.     Thank you,     Freedom of Information Office  Board of Governors of the Federal Reserve System."

December 31, 2018

To Federal Reserve Cadence Bank Redacts 80% of Letter Urging Fast Approval and Withholds from Inner City Press

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

SOUTH BRONX, December 28 – 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. Now a new low: 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. When it arrived, as intended after the Fed's rubber stamp approva, the letter was more than 80% redacted, arguing for a fast approval. This is a new low, and something we will be confronting and combating in 2019. We have begun with this new FOIA request: "This is a FOIA request for the all withheld and redacted portions of the submissions by Cadence to the FRS to acquire State Bank, including but not limited to the outrageously 80% redacted Nov 1, 2018 letter which Cadence' counsel, rather than emailing to us, sent by mail, one and then twice, the second on Dec 14 AFTER the Fed approved the merger. In this connection we are also request any and all FRB records concerning this and all other Cadence submissions in the last year, and any records reflecting regulatory disciplining by the Fed of banks or BHCs for withholding information in bad faith, for the past three years. Each portions of this request can be considered separately so as to ensure receipt as fast as possible of the unredacted, wrongfully delayed Nov 1, 2018 letter." The Fed in a December 7 order shrugged it all off...

December 24, 2018

An absurdity, or contempt by the Fed for the public and process: AFTER the Fed on Dec 7 approved Synovus' application, this:

Re:       Freedom of Information Act Request No. F-2019-00031

Dear Mr. Lee,

On November 13, 2018, the Board of Governors (“Board”) received your electronic message dated November 10, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, for all withheld portions of the applications and applications additional information submitted by Synovus to acquire FCB Financil including but not limited to presumptively mis-labeled “Confidential” exhibits as “Confidential” Exhibit 1 to Synovus' October 31 response, which appears to be personnel to be integrated into fair lending, while Synovus discloses its own staff's names, and for all records reflecting FRS communications with Synovus or FCB Financial or their affiliates for the past twelve (12) months.

Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until December 27, 2018, 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 December 27, 2018, 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.

  Yeah, the law...

 December 17, 2018


Targeting of Community Reinvestment Act by Otting Includes Excluding Comment on 25 Branch Closings by WSFS

By Matthew R. Lee, Video, story, FOIA docs

SOUTH BRONX, December 15 – The US Treasury Department is the next stage of a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. The protagonist, akin to Scott Pruitt when he was at the US Environmental Protection Agency or Ryan Zinke at Interior, is Comptroller of the Current Joseph Otting. On September 12 Fair Finance Watch (and on FOIA, Inner City Press) commented to the OCC, here. At the November 19 deadline, not yet posted was Inner City Press' November 17 fourth comment, just as Otting's OCC absurdly waited 13 days to try to rule it does not have to consider Fair Finance Watch's comments on WSFS Bank's application to acquire Beneficial. Now, after the OCC gleefully closed its comment period on that, WSFS on December 13 announced it will close 25 branches. One would think Otting would have to re-open the comment period. But that's not how Otting rolls. Here's WSFS: "WSFS Financial Corporation (Nasdaq: WSFS) (“WSFS”) and Beneficial Bancorp, Inc. (Nasdaq: BNCL) (“Beneficial”), jointly announced a retail banking office optimization plan that aligns with the previously reported intent to merge Beneficial Bank into WSFS Bank.  The plan includes the consolidation of 25% of the combined Beneficial and WSFS retail banking offices due to an overall decline in branch transactional activity, Customers’ rapid adoption and usage of digital services, geographic overlap and optimization opportunities.  To continue delivering on its mission of “We Stand For Service” amidst evolving Customer expectations, WSFS also committed to reinvest an incremental $32 million of the estimated cost savings from the retail office optimization plan into a five-year transformational investment in technology and delivery systems to create a top-tier physical and digital servicing platform that will significantly enhance Customer experiences across all business lines.

Teams from both institutions conducted an extensive analysis of the combined franchise to study market overlap, transaction trends, space considerations, cost of ownership, business opportunities, the brand experience, visibility from high-traffic roadways, and the accessibility of each location.  WSFS leveraged this due diligence to determine that it will consolidate 14 Beneficial and 11 WSFS retail banking offices of the combined network.  WSFS also plans to sell five additional  retail banking offices located on the outer edges of the combined core footprint. Most closures will occur at the conversion of Beneficial Bank into WSFS Bank, which is expected to occur in August 2019.

Eighty percent (80%) of the consolidating retail offices are less than three miles from remaining locations, including nearly a third that are less than a mile away.  WSFS is offering jobs to all Beneficial and WSFS team members of the consolidating banking offices within the Retail Division of WSFS Bank.  WSFS will also raise the minimum wage across the combined organization to WSFS’ current minimum of $15 an hour.

The planned combination and ongoing delivery transformation will make WSFS the largest, premier, longest-standing, locally-headquartered community bank for the Greater Delaware Valley with approximately $13 billion in assets and growing.

“We have worked quickly, but diligently, on our plan to combine our two institutions, which included identifying the retail space that will best help us deliver top-tier quality services and solutions for Customers across the Delaware Valley,” said Rodger Levenson, WSFS’ Executive Vice President and Chief Operating Officer, who will become President and Chief Executive Officer on January 1, 2019.  “This retail banking office optimization initiative and our planned technology reinvestment, combined with a larger balance sheet and an intimate knowledge of the market, affirms our unique position to fill a long-standing gap between big banks and smaller community banks in the Philadelphia-Camden-Wilmington MSA.”

WSFS has posted on its website (wsfsbank.com/beneficial) the 25 retail banking offices that are slated to consolidate as part of the retail banking office optimization plan.  WSFS will begin communicating these consolidations and other merger-related information to Beneficial and WSFS Customers in the first quarter of 2019 after the combination receives regulatory approval and the deal closes."  The lists are by country, only for download. But Inner City Press has timely protested WSFS to the Federal Reserve - and has now found out that WSFS is even trying to withhold its CRA information from the public, photo here. So Inner City Press has submitted this Freedom of Information Act request: " This is a FOIA request for the all withheld portions of the applications by WSFS to acquire Beneficial, including but not limited to presumptively mis-labeled “Confidential” exhibits about WSFS's CRA program (“Confidential” Exhibit 9), (Beneficial's subsidiaries (“Confidential” Exhibit 3), Board of Directors resolutions, due diligence (“Confidential” Exhibit 10), operating economy / cost savings (there are branch closings projected), names of prospective managers (ages, requested on application, apparently not provided), and for all records reflecting FRS communications with WSFS or Beneficial or their affiliates for the past twelve (12) months."

December 3, 2018

The Federal Reserve, it seems, doesn't review banks' requests for confidential treatment. So "This is a FOIA request for the all withheld portions of the applications by WSFS to acquire Beneficial, including but not limited to presumptively mis-labeled “Confidential” exhibits about WSFS's CRA program (“Confidential” Exhibit 9), (Beneficial's subsidiaries (“Confidential” Exhibit 3), Board of Directors resolutions, due diligence (“Confidential” Exhibit 10), operating economy / cost savings (there are branch closings projected), names of prospective managers (ages, requested on application, apparently not provided)"

November 26, 2018

Cadence Bank Urges OCC To Speed Regulatory Approvals While Withholding Info on State Bank in Georgia

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

SOUTH BRONX, November 20 – Cadence Bancorporation which has a disparate lending record has applied to buy State Bank in Georgia, and has seemingly jumped the gun before having the required Federal Reserve Board approval. On October 18, Fair Finance Watch submitted a timely comment to the Federal Reserve Board in Washington, below - and got back a copy of a letter from the Federal Reserve Bank of Dallas forwarding its comment to Cadence's outside counsel at Wachtell Lipton -- Patricia Robinson, who used to be with the Fed's Legal Division. Inner City Press will have more on that. Now on November 20 the Fed has extended its time to respond to Inner City Press' FOIA request, the day after Cadence commented to Joseph Otting's OCC's Advance Notice of Proposed Rulemaking urging his OCC to "make the application process for expansionary actions less contentious." How about not making frivolous requests to have regulators withhold information until they hope the "expansionary action" is consummated?  Here's from FFW's comment: "This is a request for a full copy of, and a timely first comment on, the Applications of Cadence Bancorporation, Houston, Texas; to acquire State Bank Financial Corporation, Atlanta, Georgia, and thereby indirectly acquire State Bank and Trust Company, Macon, Georgia

As an initial matter, this is a request that the FRS immediately send by email to Inner City Press all non-exempt portions of the applications / notices for which the Applicants have requested confidential treatment.

Fair Finance Watch has been tracking Cadence Bank: In 2017 in the Dallas, Texas MSA for convention home purchase loans, Cadence made 99 such loans to whites - and NONE, not a single origination, to African Americans.

In 2017 in the Houston Texas MSA for convention home purchase loans, Cadence made 236 such loans to whites - and only 15 to African Americans, and only 23 to Latinos. This is not in keeping with the aggregate, which made 37,128 such loans to whites, 3151 to African Americans and 8215 to Latinos.

In 2017 in the Birmingham, Alabama MSA for convention home purchase loans, Cadence made 66 such loans to whites - and only ONE to African Americans. Even combining in Table 4-1, it was 79 home purchase loans to whites and only THREE to African Americans.

This should also be address in this proceeding, including at the requested evidentiary hearing:

“Cadence Bank - Racist manager

2800 Post Oak Blvd Suite 101, Houston, TX 77056, USA

I had my 2 business accounts at the Williams tower location, I tried talking to the manager about small business loans she always avoided me looking at me kind of weird whenever I done withdrawals she always asked me why I'm taking money out after 3 months she sent me a Leter saying she's going to be closing my account because I take money out ones a week for payroll and she didn't like that.”

Inner City Press is also concerned about this statement imply gun-jumping, in the investors' call announcing the proposal, here.

Paul Murphy: “Oh boy, you’re right. It’s not in the model. It’s significant. I mean, there is just a lot of overlap. I’ve got a prospect for AloStar. I’m going to see them this afternoon. We can start it on a great potential new piece of business for them today. And there will be more and more of that.”

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

November 19, 2018

Step by step from the Fed on Synovus: "In connection with the application filed under Section 3 of the Bank Holding Company Act by Synovus Financial Corp., Columbus, Georgia, to merge with FCB Financial Holdings, Inc. and thereby indirectly acquire Florida Community Bank, N.A., both of Weston, Florida, and the application filed under section 18(c) of the Federal Deposit Insurance Act by Synovus Bank, Columbus, Georgia, to merge with Florida Community Bank, please respond to the additional question below.

Provide updated pro forma consolidated financial statements and capital ratios as of September 30, 2018.

In accordance with the Board’s procedures regarding ex parte communications, a copy of the attached request will be sent to the commenters in this case.  Please provide a copy of the public portion of your response (together with any attachments) directly to the commenters.  Any information for which you desire confidential treatment should be so labeled and separately bound in accordance with the Board’s rules regarding confidential treatment of information at 12 CFR 261.15. "
November 12, 2018

  Inner City Press has had to FOIA the Fed: "This is a FOIA request for the all withheld portions of the applications and applications additional information submitted by Synovus to acquire FCB Financil including but not limited to presumptively mis-labeled “Confidential” exhibits as as “Confidential” Exhibit 1 to Synovus' October 31 response, which appears to be personnel to be integrated into fair lending, while Synovus discloses its own staff's names..". This is scam.

November 5, 2018

  Synovus has told the Fed, after Fair Finance Watch's protest, that "since the 2017 CRA Performance Evaluation, a Nashville area branch that was previously classified as being located in a middle income area was reclassified to being located in a moderate income branch." Wow, that is some great performance.

October 29, 2018

The Fed has written to Synovus again: "In connection with the application filed under section 3 of the Bank Holding Company Act by
Synovus Financial Corp. (“Synovus Financial”), Columbus, Georgia, to merge with FCB
Financial Holdings, Inc. (“FCB Financial Holdings”) and thereby indirectly acquire Florida
Community Bank, N.A. (“Florida Community Bank”), both of Weston, Florida, and the
application filed under section 18(c) of the Federal Deposit Insurance Act by Synovus Bank,
Columbus, Georgia, to merge with Florida Community Bank, the following additional
information is requested. Supporting documentation should be provided as appropriate.
1. In the submission dated October 19, 2018 (“AI Response”), in response to question 6 of
the Board’s October 16, 2018 additional information request (“AI Request”), Synovus
Financial represented that the CRA and consumer compliance-related (including fair
lending) governance and oversight systems described in the AI Response would be
adopted by the combined bank upon consummation. Indicate on a pro forma basis, the
key individuals who would be responsible for providing such oversight, including
management, of these programs, and their qualifications. For each key individual,
specify the organization he or she currently works for (e.g., Synovus Bank, Florida
Community Bank, or another entity), as well as his or her current position and title at that
organization. Finally, indicate to what extent Synovus Bank’s consumer compliance
(including fair lending) program would be adopted at the merged bank following
consummation of the proposed transaction.
2. Question 1 of the AI Request included a request for an “update on Synovus Bank’s
[CRA] activities since its November 2017 CRA Performance Evaluation and Florida
Community Bank’s CRA activities since its March 2017 CRA Performance Evaluation,
in general, and in particular with respect to the assessment areas listed as a concern by
either commenter” to the extent that information had not already been provided in the
application or in any other submission. Provide this update with respect to small business
lending in the following areas (and their corresponding assessment areas) raised as a
concern "
October 22, 2018


Cadence Bank Bid For State Bank in Georgia Challenged by Fair Finance Watch to Fed Revolving Door

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

SOUTH BRONX, October 18 – Cadence Bancorporation which has a disparate lending record has applied to buy State Bank in Georgia, and has seemingly jumped the gun before having the required Federal Reserve Board approval. On October 18, Fair Finance Watch submitted a timely comment to the Federal Reserve Board in Washington, below - and got back a copy of a letter from the Federal Reserve Bank of Dallas forwarding its comment to Cadence's outside counsel at Wachtell Lipton -- Patricia Robinson, who used to be with the Fed's Legal Division. Inner City Press will have more on that. For now, here's from FFW's comment: "This is a request for a full copy of, and a timely first comment on, the Applications of Cadence Bancorporation, Houston, Texas; to acquire State Bank Financial Corporation, Atlanta, Georgia, and thereby indirectly acquire State Bank and Trust Company, Macon, Georgia

As an initial matter, this is a request that the FRS immediately send by email to Inner City Press all non-exempt portions of the applications / notices for which the Applicants have requested confidential treatment.

Fair Finance Watch has been tracking Cadence Bank: In 2017 in the Dallas, Texas MSA for convention home purchase loans, Cadence made 99 such loans to whites - and NONE, not a single origination, to African Americans.

In 2017 in the Houston Texas MSA for convention home purchase loans, Cadence made 236 such loans to whites - and only 15 to African Americans, and only 23 to Latinos. This is not in keeping with the aggregate, which made 37,128 such loans to whites, 3151 to African Americans and 8215 to Latinos.

In 2017 in the Birmingham, Alabama MSA for convention home purchase loans, Cadence made 66 such loans to whites - and only ONE to African Americans. Even combining in Table 4-1, it was 79 home purchase loans to whites and only THREE to African Americans.

This should also be address in this proceeding, including at the requested evidentiary hearing:

“Cadence Bank - Racist manager

2800 Post Oak Blvd Suite 101, Houston, TX 77056, USA

I had my 2 business accounts at the Williams tower location, I tried talking to the manager about small business loans she always avoided me looking at me kind of weird whenever I done withdrawals she always asked me why I'm taking money out after 3 months she sent me a Leter saying she's going to be closing my account because I take money out ones a week for payroll and she didn't like that.”

Inner City Press is also concerned about this statement imply gun-jumping, in the investors' call announcing the proposal, here.

Paul Murphy: “Oh boy, you’re right. It’s not in the model. It’s significant. I mean, there is just a lot of overlap. I’ve got a prospect for AloStar. I’m going to see them this afternoon. We can start it on a great potential new piece of business for them today. And there will be more and more of that.”

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

October 15, 2018

 From a Fed approval order last week : "The HHI in this market would increase by 261 points, from 1604 to 1865."

October 8, 2018

Allan Kamensky
Synovus Financial Corporation
General Counsel & Secretary
1111 Bay Avenue, Suite 500
Columbus, Georgia 31901
Dear Mr. Kamensky:
This refers to the application by (1) Synovus Financial Corp., Columbus, Georgia to acquire
FCB Financial Holdings, Inc. and thereby acquire Florida Community Bank, N.A., both of
Weston, Florida (Bank), pursuant to section 3(a)(3) and 3(a)(5) of the Bank Holding Company
Act; and (2) Synovus Bank, Columbus, Georgia to merge with Bank, pursuant to section 18(c) of
the Federal Deposit Insurance Act. Enclosed is a copy of a letter received from Fair Finance
Watch and Inner City Press commenting on the application.
Neither the Bank Holding Company Act nor the Board's Regulation Y requires a response from
Applicant. However, if you wish to respond, your comments should be received by this Reserve
Bank within eight business days from the date of this letter.

October 1, 2018

Now

The Federal Reserve Board on Thursday announced the termination of the enforcement action listed below:

Presidential Holdings, Inc., Bethesda, Maryland
Supervisory Agreement, issued by the Office of Thrift Supervision, dated May 3, 2010 (PDF)
Terminated September 25, 2018

September 24, 2018

President Donald J. Trump today announced his intent to nominate the following individuals to key positions in his Administration:
Jean Nellie Liang of Illinois, to be a Member of the Board of Governors of the Federal Reserve System for the remainder of a 14-year term expiring January 31, 2024. Ms. Liang is a Senior Fellow in Economic Studies at the Brookings Institution and a Visiting Scholar at the International Monetary Fund’s Monetary and Capital Markets Department.  Previously, Ms. Liang served as Director of the Division of Financial Stability at the Board of Governors of the Federal Reserve System.  Ms. Liang is a member of the Congressional Budget Office’s Panel of Economic Advisors and was a lecturer at the Yale School of Management.  She earned her B.A. in economics from the University of Notre Dame and Ph.D. from the University of Maryland. 
She wrote about subprime...

September 17, 2018

  The Federal Reserve is, for now, withholding CRA information under this statement, "Exhibit H include information not disclosed to the general public. Competitors of Applicant should not be allowed access to this information because Applicant cannot access its competitors' strategic practices. This information could provide competitors with valuable insights into Applicant's business focus and plan of operations."  We'll have more on this.

September 10, 2018

From Fed Reserve Bank: If you seek any “confidential” information regarding the application under the Freedom of Information Act (“FOIA”), you must submit a request to the Board’s Freedom of Information Office.

Inner City Press: Thanks. While I'm thinking it's why you put quotation marks around "Confidential," we'd be seeking all information that the applicant mis-characterized as withholdable under FOIA. Does your Federve Bank review the propriety of the applicant's argument that portions are withholdable under FOIA, such as in this case "Confidential" Exhibits D and E in their entirety?

Fed: Dear Mr. Lee: Applications staff reviewed the exhibits designated as “confidential” by the applicant and considered these exhibits to contain nonpublic information.  If you seek copies of confidential information under the Freedom of Information Act, you must submit a request to the Board’s Freedom of Information Office, as described in my earlier email.

  "Contain"? So segregable information is not released? FOIA-lite?

September 3, 2018

  So will the Federal Reserve end up following Joe Otting in trashing community reinvestment? Does the Fed remember how Otting gamed their system when his OneWest Bank was selling itself to CIT? We'll see.

August 27, 2018

Bloomberg says "Have U.S. companies gotten too big and too powerful? Does growing concentration -- more market share in fewer corporate hands -- explain why wage growth has stagnated, income inequality has gotten worse and investment and innovation have fallen behind? These are some of the hottest questions in economic circles these days, and the U.S. Federal Reserve is looking for answers. As central bankers start to meet in Jackson Hole, Wyoming, for the Federal Reserve Bank of Kansas City’s annual symposium, it will be the main topic." But the Fed has allowed and encouraged the "concentration" in the financial services sector...

August 20, 2018

Last straw: The Federal Reserve has ended its "enforcement action" against HSBC for money laundering - which included for murderous drug gangs. Plus ca change...

August 13, 2018

From the Fed, Aug 10: "The Federal Reserve Board on Friday announced an $8.6 million fine against Citigroup for the improper execution of residential mortgage-related documents.

The $8.6 million penalty addresses the deficient execution and notarization of certain mortgage-related affidavits prepared by a subsidiary, CitiFinancial. The improper practices occurred in 2015 and were corrected. CitiFinancial exited the mortgage servicing business in 2017.

Also on Friday, the Board announced the termination of an enforcement action from 2011 against Citigroup and CitiFinancial related to residential mortgage loan servicing. The termination of this action was based on evidence of sustainable improvements." What improvements?

August 6, 2018

On August 3 the Fed went Finnish: "Nordea Bank Sweden has established controls and procedures for the proposed branch to
ensure compliance with U.S. law and for its operations in general, and these will be continued at Nordea Finland following the Merger.
Finland is a member of the Financial Action Task Force and subscribes to its recommendations on measures to combat money laundering and international terrorism. "

July 30, 2018

The Fed says, "The Federal Reserve recognizes that most banks want to serve all consumers and few
would intentionally choose to avoid minority areas. Nonetheless, some banks treat minority
neighborhoods less favorably.
For example, redlining risk may increase because of a failure to market products or locate
branches in the minority areas in the bank’s market, or because of changes in the bank’s
business model, such as through mergers, acquisitions, or new lending patterns. The Federal
Reserve conducts a risk-focused review of potential redlining risk, consistent with the
2009 Interagency Fair Lending Examination Procedures.5
Below are the key risk factors considered by the Federal Reserve in the redlining review as
well as some practical steps controls for mitigating risk.
Community Reinvestment Act (CRA) assessment area. Federal Reserve examiners
review whether the bank’s assessment areas appear to inappropriately exclude majority
minority census tracts.
Lending record. Federal Reserve examiners review whether the bank’s record of Home
Mortgage Disclosure Act (HMDA) mortgage lending and/or CRA small business lending
shows statistically significant disparities in majority minority census tracts when compared
with similar lenders.
Branching strategy. Federal Reserve examiners review whether the bank’s strategy for
branch or loan production office locations appears to exclude majority minority census
tracts. Marketing and outreach strategy. Federal Reserve examiners review whether the
bank’s marketing and outreach strategy appears to treat majority minority census tracts
less favorably.
Complaints. Federal Reserve examiners review whether any complaints by consumers
or consumer advocates raise concerns that the bank treats certain geographies differently
on a prohibited basis."  we'll see...

July 23, 2018

On July 19, the Federal Reserve Board announced the termination of the enforcement action against Community Banks of Georgia, Inc., Jasper, Georgia...

July 16, 2018

Now the Fed has terminated its enforcement action against UNITED BANK LIMITED, Karachi, Pakistan and UNITED BANK LIMITED's NY branch.. Speaking of NY branches, see here...

July 9, 2018

 So the Fed last week ended an enforcement against Amboy Bancorporation - from 2009...

July 2, 2018

Even the Federal Reserve had to admit that Deutsche Bank again failed the stress test. Now what - Commerzbank? Watch this site.

June 25, 2018

Check out the stress tests: https://www.federalreserve.gov/publications/files/2018-dfast-methodology-results-20180621.pdf

June 18, 2018

As Federal Reserve Rubber Stamps Merger By Ameris Jerome Powell Omits Regulatory Duties

By Matthew R. Lee, Patreon

NEW YORK, June 14 – The bank with the worst record in the United States for gouging consumers with overdraft fees, Ameris, has nevertheless gotten a rubber stamp approval from the Federal Reserve Board, to buy Hamilton State Bancshares in Georgia. Fair Finance Watch submitted formal opposition with the Fed, citing the gouging, Ameris' disparate mortgage lending record in Atlanta, Georgia and Florida, and the Community Reinvestment Act. See below. Earlier this year Ameris admitted in a responses that one of its filed application was false when it said it would continue the CRA policies of Atlantic - see full response on Patreon, here, question 3. Still, the Fed's June 13 order blandly recites " a commenter objected to the proposal on the basis of alleged disparities in the number of home mortgage loans made by Ameris Bank to, and/or in the rate of denials for home mortgage applications from, African Americans and/or Hispanics, as compared to whites, in Atlanta, Georgia; Jacksonville, Florida; and Tallahassee, Florida, based on data reported under the Home Mortgage Disclosure Act of 1975 (“HMDA”). The commenter also alleged that Ameris Bank engaged in predatory collection of overdraft fees and expressed concern over Ameris’s recent record of mergers and acquisitions." The concerns continue to grow.  Inner City Press  requested records under the Freedom of Information Act - but the Fed these days can take months to respond. On June 13, alongside the Ameris approval, Fed chair Jerome Powell answered a pre-picked question that the Fed's job involves interest rates and maximum employment. He did not mention the Fed's bank regulatory responsibilities. Seems he thinks someone else is doing that - but that someone is no longer the Consumer Financial Protection Bureau, nor the OCC.

June 11, 2018

  Now there's a 60 day comment period on what's called the "proposal to simplify and tailor 'Volcker rule,'" here.
June 4, 2018

Weakening of Volcker Rule Promoted By Fed's Powell and Quarles Without Wells Fargo Recusal

By Matthew R. Lee, Audio

NEW YORK, May 30 – The US Federal Reserve Board, with more than half of its seats vacant and one of its three Governors conflicted out on Wells Fargo now wants to weaken the so-called Volcker Rule, for the benefit of the largest banks. This is the same Federal Reserve which recently delayed for months in responding to Inner City Press' request under the Freedom of Information Act, and which has taken to rubber stamping mergers even by banks with interest rates described as usurious, like Ameris Bank. Fed Chair Jerome Powell said, "Firms that do more modest amounts of trading will face fewer requirements." Randal K. Quarles, the Governor ostensibly recused on Wells Fargo which has an interest in the Volcker Rule said "I view this proposal as an important milestone in comprehensive Volcker rule reform, but not the completion of our work." There is a commnt period, here. We'll have more on this. When the International Monetary Fund reviews developed countries' banking sectors, particularly in Europe, some banks' participation in predatory lending gets over looked. Consider Deutsche Bank, and the IMF's May 14 assessment of the Germany banking sector, which Inner City Press published below when it was  just out from under embargo. Now consider the US Federal Reserve's solicitude, expressed by new Governor Randal Quarles: "Willingness by the United States to reconsider its calibration may prompt other jurisdictions to do the same, which could better the prospects of successful resolution for both foreign G-SIBs operating in the United States, and for U.S. G-SIBs operating abroad... Any such balance is likely to be improvable with experience, reflection, and debate. We are interested in views from the firms and the public on how the regimes can be improved." This while draft legislation pends that would allow global banks to low-ball their US holdings, and US Comptroller of the Currency Joseph Otting targets the Community Reinvestment Act of 1977.  We'll have more on this. From the IMF on May 14 "The German banking and life insurance sectors should accelerate their restructuring to bolster profitability and reduce risks. In the banking sector, the regulatory capital ratio has increased, but the cost-to-income ratio and leverage remain high. The high cost structure, alongside low net interest margins, provisions for compliance violations, and the need to adjust to the new regulatory environment, continue to weigh on profitability. Restructuring is ongoing in the banking sector, but the process must be accelerated through faster implementation of restructuring plans, continued development of fee-based income, and further consolidation. In the life insurance sector, low interest rates have dented solvency ratios, and further progress is needed to reduce reliance on guaranteed return products. In this context, supervisory attention to interest rate risk and progress in implementing restructuring plans both in banking and insurance should continue." What about abuse of consumers, participation in predatory lending schemes and other abuses? What about Greece? What about Deutsche bank as the riskiest bank? May 28, 2018

We note that in Federal Reserve governor Brainard's speech on CRA there is no mention of enforcement of CRA, or of the word "merger" or "expansion" or "application" -- we'll have more on this. https://www.federalreserve.gov/newsevents/speech/brainard20180518a.htm

May 21, 2018

De-Regulation of Global Banks Pitched by Fed's Quarles After As IMF Ignores Predatory Deutsche

By Matthew R. Lee, Audio

NEW YORK, May 14 – When the International Monetary Fund reviews developed countries' banking sectors, particularly in Europe, some banks' participation in predatory lending gets over looked. Consider Deutsche Bank, and the IMF's May 14 assessment of the Germany banking sector, which Inner City Press published below when it was  just out from under embargo. Now consider the US Federal Reserve's solicitude, expressed by new Governor Randal Quarles: "Willingness by the United States to reconsider its calibration may prompt other jurisdictions to do the same, which could better the prospects of successful resolution for both foreign G-SIBs operating in the United States, and for U.S. G-SIBs operating abroad... Any such balance is likely to be improvable with experience, reflection, and debate. We are interested in views from the firms and the public on how the regimes can be improved." This while draft legislation pends that would allow global banks to low-ball their US holdings, and US Comptroller of the Currency Joseph Otting targets the Community Reinvestment Act of 1977.  We'll have more on this. From the IMF on May 14 "The German banking and life insurance sectors should accelerate their restructuring to bolster profitability and reduce risks. In the banking sector, the regulatory capital ratio has increased, but the cost-to-income ratio and leverage remain high. The high cost structure, alongside low net interest margins, provisions for compliance violations, and the need to adjust to the new regulatory environment, continue to weigh on profitability. Restructuring is ongoing in the banking sector, but the process must be accelerated through faster implementation of restructuring plans, continued development of fee-based income, and further consolidation. In the life insurance sector, low interest rates have dented solvency ratios, and further progress is needed to reduce reliance on guaranteed return products. In this context, supervisory attention to interest rate risk and progress in implementing restructuring plans both in banking and insurance should continue." What about abuse of consumers, participation in predatory lending schemes and other abuses? What about Greece? What about Deutsche bank as the riskiest bank? May 14, 2018

On Ameris, the Fed recited "a commenter objected to the proposal on the basis of alleged disparities in the number of home mortgage loans to and/or in the rate of denials for home mortgage applications from African Americans and/or Hispanics, as compared to whites,
in Atlanta, Georgia; Jacksonville, Florida; and Tallahassee, Florida, based on data reported under the Home Mortgage Disclosure Act of 1975. The commenter also alleged that Ameris Bank engaged in predatory collection of overdraft fees and expressed concern over Ameris’s recent record of mergers and acquisitions and planned branch closures." That's right - and we'll stay on this.

May 7, 2018

On May 1, the Fed announced " Federal Reserve Board on Tuesday announced that it has fined The Goldman Sachs Group, Inc., $54.75 million for the firm's unsafe and unsound practices in its foreign exchange (FX) trading business." Sounds more like April 1, April Fool's Day - Goldman doesn't even flinch at this size of fine...

April 30, 2018

The Treasury Department recommends that the Federal Reserve (and FDIC) follow the OCC is removing one of the only teeth the CRA, denying applications after a needs to improve CRA rating. The Fed better not...

April 23, 2017

A Fed proposal introduces a stress capital buffer (SCB) a concept designed to produce capital requirements for large banking organizations that are firm-specific and risk-sensitive. “Our regulatory measures are most effective when they are as simple and transparent as possible, and this proposal significantly simplifies our capital regime while maintaining its strength,” the Fed’s Vice Chairman for Supervision Randal Quarles said. “It is a good example of how our work can be done more efficiently and effectively, and in a way that bolsters the resiliency of the financial system.” Quarles has recused himself from decisions on Wells Fargo...

April 16, 2018

The Federal Reserve Bank of Atlanta has asked some questions of Ameris, on Hamilton - without addressing or acting on Ameris' false statements in the other still pending proceeding. We'll have more on this.

April 9, 2018

At NY Fed, Dudley Replaced By SF's Williams, Who Oversaw Wells Fargo's Many Frauds

By Matthew R. Lee, Patreon

NEW YORK, April 3 – After much focus on who at the Federal Reserve Bank of New York should replace outgoing William Dudley, on April 3 the Fed did the expected, picking insider John Williams from the San Fransisco Fed who oversaw Wells Fargo's many frauds. We'll have more on this. This comes days after Dudley himself on March 30 misrepresented the bill S.2155 as offering relief to "small banks" -- actually, it's banks up to $250 billion in assets, and foreign mega-banks larger than that. Dudley's misleading comment came on the New York public radio show of Brian Lehrer, who erroneously said that the bill has been enacted "by Congress" when it has only passed the Senate. Meanwhile everyone from Mayor Bill de Blasio to Senator Kirsten Gillibrand has been saying the Fed's process for naming the President of its Reserve Bank is not transparent enough. Now that the expected Williams has been picked, what next?

April 1, 2018

... Collusion between payday lenders and national banks has been invited by US Comptroller of the Currency Joseph Otting, under whose watch OneWest Bank generated fake public comments urging approval of its merger with CIT. Otting has lifted the 2002 consent order prohibiting ACE Cash Express from "partnering" with national banks. Speaking earlier in, where else, Las Vegas Otting said, "We think there’s a big market there that’s underserved, that really has the ability to be served by capital going forward." When he was selling off OneWest, those whose e-mail addresses and identities were stolen in order to promote the merger were thanked by David Finnegan of the OCC Otting now runs. Finnegan then asked OneWest's and Otting's lawyer Stephen M. Salley at Sullivan & Cromwell to explain. We'll have more on this - there's a lot of explaining to do. On March 14 as what was presented as a community bank regulatory relief bill was passed in the U.S. Senate 67-31 as S.2155, along with undercutting fair lending enforcement the bill would provide particular benefit to the US subsidiaries of some of the largest global banks. These include at least one which helped evade North Korea sanctions: Bank of Tokyo - Mitsubishi...

March 26, 2018

Fed-speak / Fed - spun “A commenter objected to the proposal alleging that, based on data reported under the Home Mortgage Disclosure Act of 1975 (“HMDA”), Charles Schwab Bank lent only to white borrowers with incomes above 120 percent of the area median income in the Reno, Nevada, Metropolitan Statistical Area..The commenter also criticized the workplace benefit plans of Charles Schwab, noting that employees of Charles Schwab had filed a lawsuit alleging that the 401(k) plans of Charles Schwab have expensive fees and poor performance that have benefited Charles Schwab at the expense of its employees. See Severson v. Charles Schwab Corp., No. 4:17-cv-00285-CW (N.D. Cal. 2017). Charles Schwab has denied any wrongdoing. The allegations regarding the performance of 401(k) plans and fees charged by plan sponsors are matters that are reviewed under the Employee Retirement Income Security Act of 1974. See 29 U.S.C. § 1001 et seq. The allegations are currently under review in the appropriate legal forum, and action on this proposal would not interfere with the court’s ability to resolve the pending litigation. See Natcom Bancshares Inc., FRB Order No. 2017-37 at 6 n.18 (December 18, 2017); M&P Community Bancshares, Inc., 92 Federal Reserve Bulletin C156, C156 n.7 (2006).”

March 19, 2018

Tthe bank with the worst record in the United States for gouging consumers with overdraft fees, Ameris, has applied to the Federal Reserve to buy  Hamilton State Bancshares - which, in the Atlanta MSA in 2016 for home purchase loans received 52 applications from whites, originated 37 of those as loans, denying only 12 applications. But for African Americans for home purchase loans, Hamilton State Bank denied every single on of the five applications that, based on its disparate marketing, it received or acknowledged. This is outrageous as is Ameris' record, and mis-statements.   Ameris when it applied to buy Atlantic Coast Financial Corporation, and thereby directly acquire shares of Atlantic Coast Bank, falsely stated in its application that it would continue the CRA policies of Atlantic - see response to AI question 3, incorporated herein by reference. On the current record, public evidentiary hearings are needed on Ameris' Hamilton (and Atlanic) applications....

March 12, 2018

All you need in a crazen headline  "Federal Reserve Board announces it will not object to the capital plan resubmitted by Capital One Financial Corporation"

March 5, 2018

   So new Fed chairman Jay Powell was questioned about the Community Reinvestment Act in the House Financial Services Committee last week - as if he were coming in fresh, and hadn't for some time been rubber-stamping contested mergers and denying FOIA appeals to get more information...

February 26, 2018

After ICP Protest to Ameris Bank Merger With Atlantic Coast, Ameris Admits Application False

By Matthew R. Lee, Patreon

NEW YORK, February 24 – The bank with the worst record in the United States for gouging consumers with overdraft fees, Ameris, has applied to the Federal Reserve to buy Atlantic Coast Bank in Florida, and thereafter Hamilton State Bancshares. On January 29, Fair Finance Watch filed formal opposition to both with the Federal Reserve, citing the gouging, Ameris' disparate mortgage lending record in Atlanta, Georgia and Florida, and the Community Reinvestment Act. See below. It turns out, from Ameris' response, that its application was false when it said it would continue the CRA policies of Atlantic - see full response on Patreon, here, question 3. Inner City Press has requested records under the Freedom of Information Act. Now the Federal Reserve has asked Ameris a series of question, full copy here on Patreon

February 19, 2018

US Bancorp Slapped by Federal Reserve for Money Laundering, Fee Gouger Ameris Still Silent

By Matthew R. Lee

NEW YORK, February 15 – Less than a week after the Federal Reserve capped Wells Fargo's growth for compliance violations, on February 15 the Fed and DOJ hit US Bancorp: "The Federal Reserve Board on Thursday ordered Minneapolis-based US Bancorp to improve risk management and oversight of its banking subsidiaries' compliance with U.S. economic sanctions, and Bank Secrecy Act and anti-money-laundering requirements. The Board also required US Bancorp to ensure that firm personnel make timely and complete disclosures to regulatory authorities and imposed a $15 million penalty. Under the terms of the Board's consent cease and desist order, US Bancorp must strengthen oversight of firmwide risk-management and compliance programs for preventing violations of anti-money-laundering and U.S. sanctions laws and put in place procedures to ensure it provides adequate and complete responses to examiner inquiries. In a separate action, the U.S. Department of Justice announced the execution of a deferred prosecution agreement with US Bancorp for violations of the Bank Secrecy Act that occurred at its national bank subsidiary. The deferred prosecution agreement provides for a $528 million forfeiture by US Bancorp. In addition, the Office of the Comptroller of the Currency and the Financial Crimes Enforcement Network announced penalties of $75 million and $185 million respectively against U.S. Bancorp's national bank subsidiary for violations of the Bank Secrecy Act." Unsaid in the Fed's press release: US Bancorp processed transactions for disgraced payday lending mogul Scott Tucker...

February 12, 2018

Something remains wrong with the Federal Reserve's website https://www.federalreserve.gov/apps/h2a/h2a.aspx - when searched by end of comment period, as of February 10 the most recent end is February 6. This hides applications and excludes the public. Inner City Press wrote to the Fed, without response or improvement. We'll have more on this.

February 5, 2018

After US OCC Apologized to Wells Fargo, Fed Imposes Cap on Growth For Abusing Consumers

By Matthew R. Lee

NEW YORK, February 2 – More than ten months after Wells Fargo Bank's Community Reinvestment Act rating was dropped two levels to "Needs to Improve," barring it from acquisitions, on February 2 the Federal Reserve said this: "Responding to recent and widespread consumer abuses and other compliance breakdowns by Wells Fargo, the Federal Reserve Board on Friday announced that it would restrict the growth of the firm until it sufficiently improves its governance and controls.. Until the firm makes sufficient improvements, it will be restricted from growing any larger than its total asset size as of the end of 2017." By contrast the Office of the Comptroller of the Currency has quietly said, in a footnote to a Bulletin issued on October 12, that "The OCC’s policy is not to lower a bank’s CRA composite or component rating by more than one rating level." See here, footnote 8. So when did this become the OCC's policy, after it dropped Wells by two levels? Call it a stealth sop to Wells Fargo - and seemingly a violation of the Administrative Procedures Act. We'll have more on this

January 29. 2018

Fed Asks Schwab About Community Reinvestment Act After Fair Finance Watch Protest

By Matthew R. Lee

WASHINGTON, January 24 – Earlier this month Inner City Press / Fair Finance Watch filed with the Federal Reserve for evidentiary hearings on the application by Charles Schwab Corporation to set up Charles Schwab Trust Bank in Henderson, Nevada, noting that Schwab has been sued by its own employees, about 401k plans. See, e.g., Severson v. Charles Schwab Corp. , N.D. Cal., No. 3:17-cv-00285-JCS, complaint filed 1/19/17. It is also noteworthy that, Inner City Press wrote to the Fed, despite the issues there, Schwab reportedly held merger talks with SoFi earlier this year. Now the Federal Reserve has written to Schwab, on January 24, with these three questions: "Provide a summary regarding the current status of litigation in Severson v. Charles Schwab Corp., No. 4:17-cv-00285-CW (N.D. Cal. 2017). 2. Provide the “home state” of CSC as that term is defined in section 10(e)(7)(B)(iv) of
HOLA, 12 U.S.C. § 1467a(e)(7)(B)(iv). 3. Provide an update on Charles Schwab Bank’s and Charles Schwab Signature Bank’s
CRA activities since each institution’s prior Community Reinvestment Act public
evaluation." We'll have more on this. Fair Finance Watch also reviewed, in Nevada, Charles Schwab Bank's lending in the Reno MSA. For home purchase loans, all of the loans were to whites (none to Latinos or African Americans), all to applicants over 120% of MSA median income. The same is true of refinance lending. On the current record, these applications should not be approved." We'll have more on this.

January 22, 2018

  The Federal Reserve Board last week took up the application of Huron Community Bank (“Huron Bank”), the state member bank subsidiary of Huron Community Financial Services, Inc. (“Huron Financial”), both of East Tawas, Michigan, has requested the Board’s approval under section 18(c) of the Federal Deposit Insurance Act (“Bank Merger Act”)1 to acquire certain assets and assume certain liabilities of a branch of First Federal of Northern Michigan. Don't blame it on CRA...

January 15, 2018

In DC, Fed Ends Enforcement Actions on 10 Including Citi & Chase After Micro-Fine of GS

By Matthew R. Lee

NEW YORK, January 12 – After the Federal Reserve let Goldman Sachs set up a bank, without any public comment, during the financial meltdown, today the Fed has announced it has fined Goldman Sachs Bank USA for violating the National Flood Insurance Act. But the fine is for only $90,000. Some wondered about this announcement - and then two minutes later, perhaps explaining, this: "The Federal Reserve Board on Friday announced the termination of enforcement actions related to residential mortgage loan servicing and foreclosure processing issued in 2011 and 2012 against 10 banking organizations: Ally Financial Inc.; Bank of America Corporation; CIT Group, Inc. (as successor to IMB HoldCo LLC); The Goldman Sachs Group, Inc.; HSBC North America Holdings, Inc.; JPMorgan Chase & Co.; Morgan Stanley; The PNC Financial Services Group, Inc.; SunTrust Banks, Inc.; and U.S. Bancorp." Wag the dog. In the battle for the US Consumer Financial Protection Bureau, on January 10 US District Judge Timothy Kelly ruled that  Leandra English lacks a likelihood of success on the merits in removing Mick Mulvaney as acting director. Meanwhile Mulvaney is putting under “strictest review” the CFPB's fund to compensate victims of fraud. And fraud is more and more pervasive. Last week Inner City Press / Fair Finance Watch filed with the Federal Reserve for evidentiary hearings on the application by Charles Schwab Corporation to set up Charles Schwab Trust Bank in Henderson, Nevada. It has been reported that this bank would “focus on Schwab’s workplace benefit plan clients, such as employers who offer 401k plans, and the intermediaries who serve them.” But Schwab has been sued by its own employees, about 401k plans. See, e.g., Severson v. Charles Schwab Corp. , N.D. Cal., No. 3:17-cv-00285-JCS, complaint filed 1/19/17 ). Schwab “larded” its own 401(k) plan with expensive and poorly performing investment funds and services that earned fees for the company at the expense of workers’ retirement savings, according to the new lawsuit, filed Jan. 19. The lawsuit also targets the performance of Schwab’s stable value fund and claims that Schwab executives allowed the plan’s trustee to profit from the unallocated plan assets it held. It is also noteworthy that, Inner City Press wrote to the Fed, despite the issues there, Schwab reportedly held merger talks with SoFi earlier this year. Fair Finance Watch has also reviewed, in Nevada, Charles Schwab Bank's lending in the Reno MSA. For home purchase loans, all of the loans were to whites (none to Latinos or African Americans), all to applicants over 120% of MSA median income. The same is true of refinance lending. On the current record, these applications should not be approved." We'll have more on this.

January 8, 2018

Something to watch: "The Federal Reserve Board on Thursday requested comment on proposed guidance that would clarify the Board's supervisory expectations related to risk management for large financial institutions. The guidance is part of a broader initiative to develop a new rating system for large financial institutions that will align with the post-crisis supervisory program. The proposed guidance would apply to large financial institutions, including: domestic bank holding companies and savings and loan holding companies with $50 billion or more in total consolidated assets; foreign banks operating in the United States with $50 billion or more in combined U.S. assets; and nonbank financial companies designated by the Financial Stability Oversight Council for supervision by the Board. Comments on this proposal will be accepted until March 15, 2018." Watch this site.

January 1, 2018

  The Federal Reserve, Inner City Press learned on December 27, held a conference call with the OCC about Sterling's unreliable CRA data. Too much information is being withheld, and Inner City Press is pursuing it. For transparency, in 2018.

December 25, 2017

BrokenViews: Powell has already made moves to relax crisis-era regulations, which will accelerate under his new vice chair, Randal Quarles. The Fed is looking to ease major constraints on banks, including the annual stress tests, the living wills exercise and the Volcker Rule limiting proprietary trading....

December 18, 2017

Well well well: "The Federal Reserve Board on Friday announced that Vice Chairman Randal K. Quarles will recuse himself from participating in matters specific to Wells Fargo & Company. While this action is voluntary and is not legally required, it is being taken to avoid even the potential appearance of a conflict of interest.

Upon his confirmation as a Board Member, Vice Chairman Quarles divested all applicable stock holdings related to Wells Fargo. However, in light of his extended family's prior sale of their interest in a bank to Wells Fargo, he has chosen to recuse himself from matters specifically involving the firm.

As a result, Vice Chairman Quarles will not vote on, or participate by decision or recommendation in, matters specifically involving Wells Fargo. He will continue to oversee the Board's supervision and regulation responsibilities as Vice Chairman for Supervision, including the development of supervisory policies and rules applicable to banking organizations generally."

December 11, 2017

On Basel III: "The federal banking agencies on Thursday announced their support for the conclusion of efforts to reform the international bank capital standards initiated in response to the global financial crisis.

The Governors and Heads of Supervision and the Basel Committee on Banking Supervision Thursday announced the finalization of the reforms to the "Basel III" agreement on bank capital standards. With this agreement, the Basel Committee will bring to conclusion the international reforms initiated in response to the global financial crisis.

The Basel III agreement, which was designed for internationally active banks, was introduced in 2010 and was instrumental in establishing revised minimum standards that increased both the quality and quantity of regulatory capital. The reforms finalized today are intended to improve risk sensitivity, reduce regulatory capital variability, and level the playing field among internationally active banks.

The agencies will consider how to appropriately apply these revisions to the Basel III reform package in the United States and any proposed changes based on this agreement will be made through the standard notice-and-comment rulemaking process."

And we'll be there.

December 4, 2017

  So after Inner City Press' letter to the Fed, they "fixed" their online listing of mergers - but did not extend any of the flawed comment periods, nor explain...

November 27, 2017

  Fair Finance Watch (and Inner City Press) has sent this to the Fed: Re: Formal request / complaint concerning FRB's failure to update its public notice of pending applications website, that it be corrected and comment periods extended

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

This is a formal request / complaint concerning FRB's failure to update its public notice of pending applications website, that it be corrected and comment periods extended.
As of today November 24, the Fed's online H2A https://www.federalreserve.gov/apps/h2a/h2a.aspx says that it has not been updated at all since November 17 - a full week ago.
But it's worse - a search of the database today finds no application with a comment period running past November 28, putting the date at which the Fed stopped updating even further back. Please explain, correct, and extend the comment periods.

November 20, 2017

  When the Fed approved South State - Park Sterling it recited that Fair Finance Watch as "A commenter objected to the proposal on the basis of alleged disparities in
South State Bank’s lending to African Americans and Hispanics, as compared to whites, in the Columbia, South Carolina Metropolitan Statistical Area (“Columbia MSA”), the
Charlotte, North Carolina MSA (“Charlotte MSA”), and the Atlanta, Georgia MSA (“Atlanta MSA”), as reflected in data reported under the Home Mortgage Disclosure Act
(“HMDA”) for 2015." Here's what FFW provided to the Fed: "  In the Atlanta, Georgia MSA in 2015 for home purchase loans, South State denied the applications of African Americans and Latinos 4.23 times more frequently than the applications of whites. Its lending did not reflect the market or other lenders: 54 home purchase loans to whites, only two to Latinos, and only ONE to an African American applicant. This is disparate. In the Colombia SC MSA in 2015 for home purchase loans, South State denied the applications of African Americans 2.79 times more frequently than the applications of whites, and denied the applications of Latinos' 3.75 times more frequently than whites. Its lending did not reflect the market or other lenders: 179 home purchase loans to whites, only ten to African Americans and only one to a Latino applicant. This is disparate. In the Charlotte NC MSA for home purchase loans in 2015, South State denied the applications of African Americans 2.22 times more frequently than the applications of whites, and denied the applications of Latinos' 6.58 times more frequently than whites. Its lending did not reflect the market or other lenders: 382 home purchase loans to whites, only thirteen to African Americans and only four to Latino applicants. This is disparate, and a pattern militating for evidentiary hearings and the denial of this application." But today's Fed cares less and less about such disparities...

November 13, 2017

 Jay Powell. Capitol Hill. November 28. Be there.

November 6, 2017

  Would Jay Powell stay in charge of (denying) FOIA appeals, as Chairman of the Fed?

BancorpSouth, after settling redlining charges, has escaped Federal Reserve regulation, announcing on Oct 31 it has approvals from the "Federal Deposit Insurance Corporation and the Mississippi Department of Banking and Consumer Finance... to improve efficiency through the elimination of redundant corporate infrastructure and duplicative regulatory oversight."

October 30, 2017

Shameful: Mid America Bank and Trust Company has a Needs to Improve CRA rating but was allowed to pay $5 million and get acquired by Reliable Community Bancshares. Impunity.

October 23, 2017

  On Associated - Bank Mutual, the Fed e-mailed Inner City Press part of the application but not, it seems, the rest of the file including the multiple protests. Maybe we're missing something... Meanwhile, Bank Mutual Corp. reported third quarter net income of $3.8 million, or 8 cents per share, down from $4.5 million, or 10 cents per share, in the third quarter of 2016.

October 16, 2017

Inner City Press / Fair Finance Watch filed: "This is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Applications by Associated Banc-Corp to merge with Bank Mutual Corporation, Milwaukee, Wisconsin and acquire Bank Mutual. The Fed has received many substantive comments on this application and should hold public hearings, including on the prospective impacts of the 36 branches that Associated would close or consolidate. See, http://www.jsonline.com/story/money/2017/09/01/branch-network-pared-36-locations-associated-bank-takes-over-bank-mutual/624805001/

Fair Finance Watch has reviewed applicant Associated's home purchase lending in the just-out 2016 HMDA data in the Milwaukee MSA and finds serious disparities militating for evidentiary hearings and the denial of this application. For conventional home purchase loans, Associated denied the applications of African Americans 4.16 times more frequently than those of whites; it made 807 such loans to whites and only 41 to African Americans. Even cumulating Table 4-1 loans with Table 4-2, Associated's denial rate disparity in 2016 was 3.71; it made 861 loans to whites and only 48 to African Americans. This is outrageous. On the current record, these applications should not be approved."

October 9, 2017

It is an outrage that former Fed governor Duke cashes out to the Wells Fargo board, while Wells is "regulated" by the Fed...

October 2, 2017

  While there are many toxic proposed bank mergers across the USA, the proposed in-market Wisconsin combination of Associated and Bank Mutual which would close branches is our focus this week - more than 300 comments filed, with the Federal Reserve comment period open until October 11 -- fire away!

September 25, 2017

South State Corporation, to the Federal Reserve, is making excuses for its record in the Atlanta MSA, and trying to withhold obviously public information. We'll have more on this.

September 18, 2017

Sen. Amy Klobuchar (D-Minn.) Sept. 14 introduced two bills intended to “modernize” antitrust enforcement, including a proposal to require big merging companies to prove their tie-ups won’t harm competition... One of Klobuchar’s proposals would shift the burden of proof for companies involved in “mega-mergers,” a term that the bill doesn’t define. Merging companies would have to prove to regulators that their deal doesn’t harm competition. Currently, it works the opposite way. Regulators are required to prove that a proposed merger is likely to harm competition to stop it.... The measure also would add the term “monopsony” to the Clayton Antitrust Act so that single buyers controlling a market would be illegal. The bill would create an “Office of the Competition Advocate” to help consumers with complaints, encourage antitrust investigations, and analyze and publish reports on merger activity.

September 11, 2017

UNreal that he was portrayed as a strong regulator... "Stanley Fischer submitted his resignation Wednesday as Vice Chairman and as a member of the Board of Governors of the Federal Reserve System, effective on or around October 13, 2017. He has been a member of the Board since May 28, 2014."

September 4, 2017

Regulators Said Sterling CRA Data Unreliable, Now Covers It Up To Approve Astoria

By Matthew R. Lee, New Platform

NEW YORK, August 30 – Sterling Bank is known by its regulators to have filed unreliable Community Reinvestment Act data from at least 2014 through 2016, a document obtained by Inner City Press showed - but then the regulators covered it up, to on August 30 approve Sterling's acquisition of Astoria. The story, and outrage, was picked up by the American Banker newspaper here, by Paul Davis and Allison Prang, crediting Inner City Press - and Sterling Bank had no comment. But the Federal Reserve's August 30 approval order states, "A commenter stated that Sterling Bank’s CRA data had been deemed unreliable, in addition to citing HMDA data disparities in Sterling Bank conventional home purchase and home improvement lending to whites compared to African Americans and/or Hispanics.  The OCC conducted reviews of the accuracy of Sterling  Bank’s HMDA and CRA data and assessed fair lending risk at Sterling Bank.  In that regard, the OCC evaluated supervisory information as well as other information provided by Sterling
Bank. Examiners noted in the Sterling Bank  CRA evaluation as of January 18, 2017 (“Sterling Bank Evaluation”), that they found errors in the data related to small business  lending, which subsequently were corrected by Sterling Bank.  Examiners relied on the
corrected data in conducting Sterling Bank’s CRA performance evaluation." BS - it was called unreliable in this proceeding. Inner City Press immediately on May 13 submitted a Freedom of Information Act request to the Federal Reserve. The Fed repeatedly extended its time to respond then finally on July 7 provided more than 400 pages - almost entirely redacted. All references to the unreliable CRA data (and needs to improve rating) have been redacted. Sample here; the rest on Patreon, here. Inner City Press immediately submitted a FOIA appeal: "Amazingly, despite taking seven weeks to respond to ICP's immediate FOIA request, all information about this consumer compliance / CRA issue has been redacted from the records produced. CRA and CRA data are presumptively of public interest and public impact. The redacted response implies that the public could be entirely excluded from the FRS' review of this important CRA issues. It is unacceptable and inconsistent with the purpose, spirit and letter of FOIA.

August 28, 2017

Watchdogging Fair Lending Evasion, FFW Challenges Redliner BancorpSouth at FDIC

By Matthew Russell Lee

South Bronx, New York, August 26 – The lack of seriousness in US bank regulation, the mechanical repeating of whatever a challanged bank says, is exemplified by the application by BancorpSouth, which Inner City Press / Fair Finance Watch challenged on disparities and which settled racial redlining charges, to drop its Federal Reserve charter and evade regulation. Now ICP/FFW has timely protested that application to the FDIC: "Dear Regional Director Elmquist, Ass't Regional Director Finnegan and others at the FDIC: "This is a first timely comment opposing, requesting hearings and an extension of the comment period on BancorpSouth's cynical application to evade regulation after its redlining and settlement. Inner City Press / Fair Finance Watch protested the applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank, and with Central Community Corporation, and thereby indirectly acquire First State Bank Central Texas, Austin, Texas. - based on racial discrimination in lending... Now BancorpSouth makes this application, and its CEO Dan Rollins states that it wants to “alleviate... regulatory oversight,” and become the “only state-chartered bank not a part of the Federal Reserve system.” We oppose this cynical evasion, particularly by one of the few banks having settled redlining charges. Let's compare: reviewing the 2015 HMDA data released by the FFIEC, ICP examined BancorpSouth's conventional home purchase lending in the Jackson, Mississippi and Baton Rouge, Louisiana and finds them troubling. In 2015 in the Jackson MS MSA for conventional home purchase loans, BancorpSouth made 346 loans to whites, only 53 to African Americans. BancorpSouth's denial rate for whites was 7% while for African Americans it was 19% -- 2.71 times higher. This was troubling. In 2015 in the Baton Rouge LA MSA for conventional home purchase loans, BancorpSouth made 47 such loans to whites and NONE to African Americans, even less than the three it made in 2012. BancorpSouth has grown more disparate. ICP is requesting evidentiary hearings and that this proposed acquisition, on the current record, not be approved. There is no public benefit."

August 21, 2017

Inner City Press / Fair Finance Watch has filed this: This is a timely first comment opposing and requesting an extension of the FRS's public comment period on the Application by South State Corporation to acquire Park Sterling Corporation, and thereby indirectly acquire Park Sterling Bank.

Fair Finance Watch has reviewed applicant South State's home purchase lending in three MSAs in three states - its heardquarters in Colombia SC, the targets Charlotte NC, and Atlanta GA - and finds serious disparities militating for evidentiary hearings and the denial of this application.

And, significantly, the specifics of which branches would be closed have not been publicized.

In the Atlanta, Georgia MSA in 2015 for home purchase loans, South State denied the applications of African Americans and Latinos 4.23 times more frequently than the applications of whites. Its lending did not reflect the market or other lenders: 54 home purchase loans to whites, only two to Latinos, and only ONE to an African American applicant. This is disparate.

In the Colombia SC MSA in 2015 for home purchase loans, South State denied the applications of African Americans 2.79 times more frequently than the applications of whites, and denied the applications of Latinos' 3.75 times more frequently than whites. Its lending did not reflect the market or other lenders: 179 home purchase loans to whites, only ten to African Americans and only one to a Latino applicant. This is disparate.

In the Charlotte NC MSA for home purchase loans in 2015, South State denied the applications of African Americans 2.22 times more frequently than the applications of whites, and denied the applications of Latinos' 6.58 times more frequently than whites. Its lending did not reflect the market or other lenders: 382 home purchase loans to whites, only thirteen to African Americans and only four to Latino applicants. This is disparate, and a pattern militating for evidentiary hearings and the denial of this application.

Meanwhile, see http://www.gastongazette.com/news/20170728/park-sterling-bank-head-says-merger-will-bring-little-fallout-for-gaston-employees: “employees in any branch that closes or is affected might have to relocate to keep their job, to places, for example, such as Charleston, South Carolina... Since last year, Park Sterling had been carrying out a local expansion that involved consolidating back-office operations and bringing jobs from South Carolina to Gastonia. Cherry said their branches on Main Avenue and South New Hope Road have seen the effects of that, and one of the decisions essentially made prior to the announced merger was to close the Main Avenue branch. 'It has limited hours and is really just handling commercial customers,' said Cherry. 'That was likely going to be closed as a result of our moves beforehand.'” South State should be asked for information and criteria about the closings and the comment period must be extended to allow entry of this information into the record and to allow comment thereon.

On the current record, hearings should be held and the application(s) should not be approved. The comment period must be extended.
August 14, 2017

Passing the buck? "A proposed guidance addressing supervisory expectations for boards of directors at banks and holding companies, published by the Federal Reserve Board this week, suggests that expectations for boards and senior management have become increasingly difficult to distinguish"

August 7, 2017

  Inner City Press / Fair Finance Watch last week filed this: "This is a timely first comment opposing and requesting an extension of the FRS's public comment period on the Application by Sandy Springs Sandy Spring Bancorp to acquire WashingtonFirst Bankshares, WashingtonFirst Bank and lst Portfolio, Inc., Fairfax, Virginia.

These transaction raises troubling Community Reinvestment Act issues. Sandy Spring has a disparate lending record, as does WashingtonFirst.

And, significantly, the specifics of which branches would be closed have not been made public, see below. The comment period must be extended.

In the Baltimore MSA in 2015 for home purchase loans, Sandy Spring denied the applications of African Americans TWENTY TWO times more frequently than the applications of whites. For refinance loans in the Washington MSA, Sandy Spring denied the applications of African Americans 8.8 times more frequently than the applications of whites. In the Washington DC MSA in 2015 for home purchase loans, Sandy Spring denied the applications of African Americans 2.8 times more frequently than the applications of whites.

In the Washington DC MSA for home purchase loans in 2015, WashingtonFirst made 13 loans to whites and NONE to African Americans or Latinos (there were similar zeroes for people of people for home improvement loans).

Meanwhile, see http://wtop.com/business-finance/2017/05/sandy-spring-buying-washingtonfirst-becoming-largest-locally-based-community-bank/: “Sandy Spring said there will be branch closings as part of the merger, though it says it is too soon to determine where overlap will require closings.” That is not acceptable: Sandy Springs should be asked for information and criteria about the closings and the comment period must be extended to allow entry of this information into the record and to allow comment thereon."

July 31, 2017

Fed and Synovus Talked "Confidential Supervisory Matter" July 21, on Cabela Application

By Matthew R. Lee, Full Doc on Patreon Here

NEW YORK, July 28 – Two months after Inner City Press reported Capital One failing in its proposal to acquire Cabela's "World's Foremost Bank," a way to try to avoid the regulators and Capital One's Community Reinvestment Act record emerged. The scam involves Synovus buying the bank then passing one the credit card receivables to Capital One, while keeping the deposits, so Capital One wouldn't be reviewed under CRA. The Fair Finance Watch has now opposed this, in a filing to the Federal Reserve, below. And now the Federal Reserve has, with all formality, informed Fair Finance Watch and Inner City Press of a July 21 meeting with Synovus, to discuss a "confidential supervisory matter," Fed "memo to file, on Patreon here.

Date: July 27, 2017
To: File
From: Federal Reserve staff
Subject: Telephone Conversation with Clifford S. Stanford, Esq. and Synovus Bank Representatives re: Application by Synovus
Bank to Acquire Substantially All of the Assets and Liabilities of World’s Foremost Bank

On July 21, 2017, staff of the Board of Governors of the Federal Reserve System (Alison Thro, Jon Stoloff, Andrew Hartlage, Brian Phillips, Betsy HowesBean, and Donald Arrington) and the Federal Reserve Bank of Atlanta (Jordan Light, Juan Sanchez, Sabrina Francis, Dwight Blackwood, Steve Wise, and
Kathryn Hinton) had a telephone conversation with representatives of Synovus Bank (Kessel Stelling, Kevin Blair, Mary Maurice Young, and
Allan E. Kamensky), Columbus, Georgia, and Clifford S. Stanford and Mark Kanaly, counsel for Synovus Bank, in connection with the application filed by Synovus Bank to acquire substantially all of assets and liabilities of
World’s Foremost Bank, Sidney, Nebraska, pursuant to section 18(c) of the Federal Deposit Insurance Act.

Staff discussed a confidential supervisory matter with Mr. Stanford and the Synovus Bank representatives." See here.

July 24, 2017

While Fed & OCC Paper Over Sterling's CRA Scam, Otting & Quarles In Senate July 27

By Matthew R. Lee, New Platform

NEW YORK, July 22 – Amid the scandal of the Federal Reserve and Office of the Comptroller of the Currency covering up Sterling Bank's unreliable Community Reinvestment Act data by withholding most of 400 pages released to Inner City Press under the Freedom of Information this month, on July 27 the US Senate will take up the nominations of Joseph Otting, formerly of Bank of America, Union Bank, US Bancorp and OneWest to be Comptroller and of Randal Quarles formerly of the Carlyle Group to head the Fed's Supervision unit. What would it portend for evasions by Sterling and larger banks?  Beyond Otting's gaming of the CAR system, another problem has arisen: Otting misrepresented his resume on education. He listed a degree on his resume from the "School of Credit and Financial Management at Dartmouth College." It's a fraud. "Joseph Otting is not a Dartmouth graduate," Dartmouth spokeswoman Diana Lawrence said. "Dartmouth does not have a school of credit and financial management." In turns out the school is a four-week program spread over two years, which rented space from Dartmouth. It's not only Sterling's CRA data is an unreliable. While at OneWest, as reported by Inner City Press in 2015, Otting was best know for trying to get his own employees, fundees and investors to submit comments to the OCC to support OneWest's purchase by CIT.  Click here. Otting wrote: From: Otting, Joseph M [at] owb.com
Sent: Wednesday, January 07, 2015 5:00 PM
Cc: Haas, Alesia Jeanne; Tran, Cindy; Kim, Glenn
Subject: Support For OneWest Bank
 
Dear Friends,
 
We were excited to announce on July 21, 2014, that IMB HoldCo LLC, the parent company of OneWest Bank entered into a merger agreement with CIT Group Inc. As part of the applications for regulatory approval of the transaction, our regulators are interested in the perspectives of the public. We are writing you to seek your support of the Bank and pending merger. This merger, if approved, would create the largest bank headquartered in Southern California with a full suite of banking products and services, which will allow us to better serve our customers. We would retain and grow jobs and are committed to continuing and expanding our efforts to serve the economic and development needs of our community. I would like to ask you to take a moment to click on the link below and submit a letter of support adding any of your own words or thoughts.
 
Please submit your letter by clicking here, or by visiting our website at www.OneWestBank.com/merger-support (if the link isn't clickable or part of the link is cut off, please copy and paste the entire URL into your browser's address bar and press Enter)
 
Thank you for your support.  Best wishes for a successful 2015 and please call on me if I can ever be of assistance.
 
Joseph M. Otting
President and CEO
OneWest Bank N.A.

July 17, 2017

While Federal Reserve Papers Over Sterling's CRA Scam, Quarles Nominated as to Board

By Matthew R. Lee, New Platform

NEW YORK, July 10 – Amid the scandal of the Federal Reserve's covering up Sterling Bank's
unreliable Community Reinvestment Act data by withholding most of 400 pages released to Inner City Press under the Freedom of Information last week, on the evening of July 10 Randal Quarles formerly of the Carlyle Group was nominated to head the Fed's Supervision unit. What would it portend for evasions by Sterling and larger banks? The other shoe still hasn't dropped on / for Marvin Goodfriend... Meanwhile amid the scandal of the US Office of the Comptroller of the Currency covering up Sterling's data by quickly issuing a Satisfactory CRA rating, on June 5 a new head of the OCC was nominated: Joseph Otting, previously of OneWest Bank. Now beyond Otting's gaming of the CAR system, another problem has arisen: Otting misrepresented his resume on education. He listed a degree on his resume from the "School of Credit and Financial Management at Dartmouth College." It's a fraud. "Joseph Otting is not a Dartmouth graduate," Dartmouth spokeswoman Diana Lawrence said. "Dartmouth does not have a school of credit and financial management." In turns out the school is a four-week program spread over two years. The White House now syas this characterization of Mr. Otting’s credentials is correct. So who will be Comptroller of the Currency? While at OneWest, as reported by Inner City Press in 2015, Otting was best know for trying to get his own employees, fundees and investors to submit comments to the OCC to support OneWest's purchase by CIT.  Click here.

July 10, 2017

Regulators Said Sterling's CRA Data Unreliable, Under FOIA Fed Blacks-Out Most of 400 Pages

By Matthew R. Lee, New Platform

NEW YORK, July 8 – Sterling Bank, which is applying for approvals to acquire Astoria Bank, is known by its regulators to have filed unreliable Community Reinvestment Act data from at least 2014 through 2016, a document obtained by Inner City Press shows. The story, and outrage, was picked up by the American Banker newspaper here, by Paul Davis and Allison Prang, crediting Inner City Press - and Sterling Bank had no comment. Inner City Press immediately on May 13 submitted a Freedom of Information Act request to the Federal Reserve. The Fed repeatedly extended its time to respond then finally on July 7 provided more than 400 pages - almost entirely redacted. All references to the unreliable CRA data (and needs to improve rating) have been redacted. Sample here; the rest on Patreon, here. Inner City Press immediately submitted a FOIA appeal: "Amazingly, despite taking seven weeks to respond to ICP's immediate FOIA request, all information about this consumer compliance / CRA issue has been redacted from the records produced. CRA and CRA data are presumptively of public interest and public impact. The redacted response implies that the public could be entirely excluded from the FRS' review of this important CRA issues. It is unacceptable and inconsistent with the purpose, spirit and letter of FOIA. ICP is hereby appealing each and every redaction in the records belated provided to ICP on July 7. This should be ruled on before the comment period closed; the comment period should be extended." Watch this site.

July 3, 2017

Regulators Said Sterling's CRA Data Unreliable, Now Admits Needs to Improve 2017, Denial?

By Matthew R. Lee, New Platform

NEW YORK, July 1 – Sterling Bank, which is applying for approvals to acquire Astoria Bank, is known by its regulators to have filed unreliable Community Reinvestment Act data from at least 2014 through 2016, a documentobtained by Inner City Press shows. The story, and outrage, has been picked up by the American Banker newspaper here, by Paul Davis and Allison Prang, crediting Inner City Press - and Sterling Bank had no comment. Instead, Sterling's outside counsel Wachtel Lipton chose to snail-mail its response to the wrong address, and not e-mail it to Fair Finance Watch. Via here, with envelope re-submitted to Fed and OCC. Now another snail-mailed response from Sterling's Wachtel, which we've put online here on Patreon: "Please see Exhibit 1 and Confidential Exhibit C" -- Inner City Press has now requested it under FOIA, but the agencies have already repeatedly extended their time. This is a scam. But crucially, even Wachtel says "Sterling did receive a Needs to Improve rating for the State of New York in Sterling Bank's most recent CRA Performance Evaluation dated January 18, 2017." We'll have more on this - the application must be denied. The OCC has now put up a roadblock to releasing the records Inner City Press has requested under the Freedom of Information Act, writing: "The purpose of this letter is to seek additional information pertaining to your recent request for information from the Office of the Comptroller of the Currency. Your request dated May 13, 2017 was received in my office on May 15, 2017. You requested any and all records related to Sterling Bank's application(s) to acquire Astoria and Sterling Bank's CRA data. Upon further review, we determined that we need clarification on the date range for search of Sterling Bank’s CRA data. If I have not received this information by COB June 19th I will assume that you no longer seek this information and consider your request closed." Inner City Press has responded: "   In response to Inner City Press' now month-old FOIA request concerning the CRA data the OCC knew and knows to be unreliable, you have asked that by June 19 ICP specify the date range for the request. While not understanding the OCC's delay in requesting this, we hereby timely specify that the date range is from three years ago to the date of your response. Please confirm receipt of this (including explaining your letter since you wrote “we need clarification on the date range for search”) and please provide the records as we intend to comment on them, for obvious reasons. Thank you." Meanwhile, Sterling's lawyers at Wachtell Lipton chose to snail mail their response to Fair Finance Watch, putting it in the mail three days after it was dated (now online via Patreon here.) How did it take the OCC a full MONTH to come up with its request? Why was the response snail mailed? This while the Federal Reserve has granted Inner City Press' request for expedited treatment of its FOIA request for all records, promising the responsive documents by June 1. But then the Fed, in a June 1 letter, unilaterally extended its time to June 22. First Fed letter on Scribd, here.

June 26, 2017

Amazingly, the Federal Reserve has for the second time extended its time to respond - to provide a single document - on Inner City Press' FOIA request about Sterling Bank's unreliable CRA data. We'll have more on this.

June 19, 2017

Regulators Said Sterling's CRA Data Unreliable, ICP on FOIA Games, Sterling Response Here

By Matthew R. Lee, New Platform

NEW YORK, June 17 – Sterling Bank, which is applying for approvals to acquire Astoria Bank, is known by its regulators to have filed unreliable Community Reinvestment Act data from at least 2014 through 2016, a document obtained by Inner City Press shows. The story, and outrage, has been picked up by the American Banker newspaper here, by Paul Davis and Allison Prang, crediting Inner City Press - and Sterling Bank had no comment. Instead, Sterling's outside counsel Wachtel Lipton chose to snail-mail its response to the wrong address, and not e-mail it to Fair Finance Watch. Via here, with envelope re-submitted to Fed and OCC. The OCC has now put up a roadblock to releasing the records Inner City Press has requested under the Freedom of Information Act, writing: "The purpose of this letter is to seek additional information pertaining to your recent request for information from the Office of the Comptroller of the Currency. Your request dated May 13, 2017 was received in my office on May 15, 2017. You requested any and all records related to Sterling Bank's application(s) to acquire Astoria and Sterling Bank's CRA data. Upon further review, we determined that we need clarification on the date range for search of Sterling Bank’s CRA data. If I have not received this information by COB June 19th I will assume that you no longer seek this information and consider your request closed." Inner City Press has responded: "   In response to Inner City Press' now month-old FOIA request concerning the CRA data the OCC knew and knows to be unreliable, you have asked that by June 19 ICP specify the date range for the request. While not understanding the OCC's delay in requesting this, we hereby timely specify that the date range is from three years ago to the date of your response. Please confirm receipt of this (including explaining your letter since you wrote “we need clarification on the date range for search”) and please provide the records as we intend to comment on them, for obvious reasons. Thank you." Meanwhile, Sterling's lawyers at Wachtell Lipton chose to snail mail their response to Fair Finance Watch, putting it in the mail three days after it was dated (now online via Patreon here.)

June 12, 2017 

On Brazil Land Grabs & CRA Flaws, Fed Parrots TIAA, Which Alludes To Confidential Info

By Matthew Russell Lee

UNITED NATIONS, June 8 – The lack of seriousness in US bank regulation, the mechanical repeating of whatever a challanged bank says, is exemplified by the Federal Reserve Board's June 7 approval of TIAA's application to acquire Everbank of Florida, which Inner City Press / Fair Finance Watch on October 29, 2016 challenged. After Inner City Press' challenge, the Fed asked some questions, and TIAA defended its investments in land grabs in Brazil. On this, the Fed's approval order repeats word for word, apparently without inquiry, the bank's law firm's defense. The bank wrote: "We are grateful for this opportunity to respond to the comment letter filed by Inner City Press / Fair Finance Watch on 29 October 2016 regarding the application submitted by TCT Holdings, Inc., Teachers Insurance and Annuity Association of America (“TIAA”)... that TIAA has engaged in improper business practices in Brazil should be considered by the Federal Reserve Board as a factor when considering the managerial resources of the Applicants. The news article cited in the Comment Letter does not provide a complete or accurate portrayal of how TIAA conducts business in Brazil and other markets... TIAA is a signatory to the U.N. Principles for Responsible Investment." The Fed's approval order also cites these UN "principles." On June 1, just before the approval, TIAA's law firm David Polk wrote in: You have asked us to supplement our responses to certain allegations made in protests by Inner City Press/Fair Finance Watch regarding the lending practices of TIAA-CREF Trust Company, FSB (“TIAA FSB”) and EverBank.  As you are aware, we have provided substantial information in response to the allegations. We have received the following information from TIAA FSB: While the allegation of discriminatory lending focuses on the St. Louis MSA by TIAA FSB, we wish to make three important points in response. First, the allegation, using HMDA data for the St. Louis MSA, focuses on a small number of loans made in the MSA.  We do not think the small sample, when analyzed, demonstrates a pattern or practice of discrimination. Second, TIAA, FSB operates no brick and mortar branches in the St. Louis MSA.  Its participation in the MSA primarily results from the use of internet offerings as well as other broader-based channels.  To focus on the results in the St. Louis MSA where there are no physical locations does not fairly reflect the nature of TIAA, FSB’s business strategy or its overall record of non-discriminatory lending. Third, as reflected above, the TIAA FSB mortgage offerings are nationwide in scope using the internet and other broad-based distribution channels.  Focusing on a single market, regardless of its location, does not fairly reflect or represent TIAA FSB’s business strategy or its overall record. On May 25, 2017, TIAA FSB received the results from its Fair Lending Examination by the OCC.  While the results of that examination constitute confidential supervisory information, it would be useful for the Federal Reserve to obtain a copy of the results of the examination.  If you wish, TIAA FSB would be pleased to seek approval to share the results of the examination with you." How cozy. We'll have more on this.

June 5, 2017

Regulators Said Sterling's CRA Data Unreliable, Fed Expedites Now Delays ICPs FOIA, OCC Cover Up

By Matthew R. Lee, New Platform

NEW YORK, June 3 – Sterling Bank, which is applying for approvals to acquire Astoria Bank, is known by its regulators to have filed unreliable Community Reinvestment Act data from at least 2014 through 2016, a documentobtained by Inner City Press shows. The story, and outrage, has been picked up by the American Banker newspaper here, by Paul Davis and Allison Prang, crediting Inner City Press - and Sterling Bank had no comment. Instead, Sterling's outside counsel Wachtel Lipton chose to snail-mail its response to the wrong address, and not e-mail it to Fair Finance Watch. Via here, with envelope re-submitted to Fed and OCC. This while the Federal Reserve has granted Inner City Press' request for expedited treatment of its FOIA request for all records, promising the responsive documents by June 1. But now the Fed, in a June 1 letter, has unilaterally extended its time to June 22: "Dear Mr. Lee, This correspondence is to provide you with an update on the status of your FOIA request. The search for records is being completed and staff is beginning to review the search results for responsiveness and releasability.  We will continue to process your request as quickly as possible.  Accordingly, the Board hopes to be able to respond to your request, or provide a status update, on or before June 22, 2017.  Very truly yours, Jeanne M. McLaughlin Manager, Freedom of Information Office." Why expedite and then extend? Why did the OCC rush a cover-up "Satisfactory" rating? We'll have more on this. First Fed letter on Scribd, here.

May 29, 2017

After Fair Finance Watch Protested Synovus - Cabela, Federal Reserve Asks Synovus 7 Questions

By Matthew R. Lee

NEW YORK, May 22 –  The Federal Reserve has asked  Synovus more than a half dozen questions on May 22, on its (straw-man)  application to acquire Cabela's World's Foremost Bank, the questions annexed on May 22 here. Two months after Inner City Press reported  Capital One failing in its  proposal to acquire this   "World's Foremost Bank," a way  to try to avoid the regulators  and Capital One's Community  Reinvestment Act record  emerged. The scam involves Synovus buying the bank then passing one the credit card   receivables to Capital One, while keeping the deposits, so  Capital One wouldn't be  reviewed under CRA. The Fair Finance Watch has now opposed this, in a filing to the Federal Reserve. NCRC has commented as well. We'll have more on this.

May 22, 2017

Regulators Said Sterling's CRA Data Unreliable, Sterling Mis-Sends Response, Fed Expedites ICPs FOIA

By Matthew R. Lee, New Platform

NEW YORK, May 20 – Sterling Bank, which is applying for approvals to acquire Astoria Bank, is known by its regulators to have filed unreliable Community Reinvestment Act data from at least 2014 through 2016, a document obtained by Inner City Press shows. The story, and outrage, has been picked up by the American Banker newspaper here, by Paul Davis and Allison Prang, crediting Inner City Press - and Sterling Bank had no comment. Instead, Sterling's outside counsel Wachtel Lipton chose to snail-mail its response to the wrong address, and not e-mail it to Fair Finance Watch. Via here, with envelope re-submitted to Fed and OCC. This while the Federal Reserve has granted Inner City Press' request for expedited treatment of its FOIA request for all records, promising the responsive documents by June 1. Fed letter on Scribd, here.

Regulators Said Sterling's CRA Data Unreliable, Sterling Mis-Sends Response, Fed Expedites ICPs FOIA, Here by Matthew Russell Lee on Scribd

Fair Finance Watch has asked both the Fed and OCC to extend their comment periods past this date. Watch this site. Sterling has issued a press release ("covered" without any analysis by Reuters) that "the Federal Reserve inadvertently made public confidential supervisory information.. Because of the legal constraints relating to disclosure of confidential supervisory information, we are working closely with our regulators to craft a more detailed public response." Sterling is working WITH the regulators - the judges in this case - to spin its inaccurate data? After on its last acquisition, challenged by ICP, having to make a CRA compliance plan? Inner City Press has submitted Freedom of Information Act requests (a response here) and Fair Finance Watch has filed additional comments to the Federal Reserve and OCC, demanding public hearings into the unreliable data AND into how the regulators were dealing with (or covering up) the issue, in stealth. We'll have more on this: the US Federal Reserve denied Fair Finance Watch's request to extend the comment period on Sterling's application, in which even the Fed suspects there is incorrect CRA data.

On May 11, the Federal Reserve Bank of New York along with questions about about branch closures and a CRA plan required after Fair Finance Watch's previous challenge to Sterling asked: "In a letter dated December 23, 2016, from the OCC to Sterling Bank regarding the OCC's data integrity review, the OCC stated that Sterling Bank's 2014-2016 CRA data is not reliable and that Sterling Bank lacks an effective process for collecting, verifying and reporting such data. To the extent that any of the CRA data in the notice is incorrect, submit the corrected data. In addition, describe Sterling Bank's efforts to address its CRA data compliance management deficiencies."

So on April 26 in Sterling's analysts' call, did CEO Jack Kopnisky or Senior EVP Luis Massiani disclose the “unreliable” CRA data to, among others, Dave Bishop – FIG Partners, Casey Haire – Jefferies, Alex Twerdahl – Sandler O'Neill,, Collyn Gilbert – KBW, Matthew Breese – Piper Jaffray and Erik Zwick – Stephens Inc? Questions about this deal (here) and the Fed's commitment to public scrutiny are raised by its simultaneous denial of FFW's request for a hearing and to extend the comment period. There is no indication that the "corrected" CRA data would ever be made available to the public, or that this issue would not have been swept under the US bank regulators' carpet, like so many others. We'll have more on this. 

May 15, 2017

Regulators Said Sterling Bank's CRA Data Unreliable, ICP Exposed It, FFW Demands Hearing

By Matthew R. Lee, New Platform

NEW YORK, May 12 – Sterling Bank, which is applying for approvals to acquire Astoria Bank, is known by its regulators to have filed unreliable Community Reinvestment Act data from at least 2014 through 2016, a document obtained by Inner City Press shows. The story, and outrage, has been picked up by the American Banker newspaper here, by Paul Davis and Allison Prang, crediting Inner City Press - and Sterling Bank has "no comment." But Fair Finance Watch has filed additional comments to the Federal Reserve and OCC, demanding public hearings into the unreliable data AND into how the regulators were dealing with (or covering up) the issue, in stealth. We'll have more on this: the US Federal Reserve denied Fair Finance Watch's request to extend the comment period on Sterling's application, in which even the Fed suspects there is incorrect CRA data.

On May 11, the Federal Reserve Bank of New York along with questions about about branch closures and a CRA plan required after Fair Finance Watch's previous challenge to Sterling asked: "In a letter dated December 23, 2016, from the OCC to Sterling Bank regarding the OCC's data integrity review, the OCC stated that Sterling Bank's 2014-2016 CRA data is not reliable and that Sterling Bank lacks an effective process for collecting, verifying and reporting such data. To the extent that any of the CRA data in the notice is incorrect, submit the corrected data. In addition, describe Sterling Bank's efforts to address its CRA data compliance management deficiencies."

So on April 26 in Sterling's analysts' call, did CEO Jack Kopnisky or Senior EVP Luis Massiani disclose the “unreliable” CRA data to, among others, Dave Bishop – FIG Partners, Casey Haire – Jefferies, Alex Twerdahl – Sandler O'Neill,, Collyn Gilbert – KBW, Matthew Breese – Piper Jaffray and Erik Zwick – Stephens Inc? Questions about this deal (here) and the Fed's commitment to public scrutiny are raised by its simultaneous denial of FFW's request for a hearing and to extend the comment period. There is no indication that the "corrected" CRA data would ever be made available to the public, or that this issue would not have been swept under the US bank regulators' carpet, like so many others. We've submitted FOIA requests. We'll have more on this. 

May 8, 2017


After Capital One Failed on Cabela, Synovus Applies & FFW Protests to Federal Reserve, Here

By Matthew R. Lee

NEW YORK, May 6 – Two months after Inner City Press reported Capital One failing in its proposal to acquire Cabela's "World's Foremost Bank," a way to try to avoid the regulators and Capital One's Community Reinvestment Act record emerged. The scam involves Synovus buying the bank then passing one the credit card receivables to Capital One, while keeping the deposits, so Capital One wouldn't be reviewed under CRA. The Fair Finance Watch has now opposed this, in a filing to the Federal Reserve: "On behalf of Inner City Press / Fair Finance Watch (FFW), this is a timely first comment opposing and requesting an extension of the FRS' public comment period on the Application by Synovus - and, we contend, CAPITAL ONE NA, to acquire the “WORLD'S FOREMOST BANK.”This comment is timely. For the record, there was initially filed with the OCC an application by Capital One to buy this “Foremost Bank.” When the compliance problems of that proposal became clear, this sham transaction was devised: for Synovus (also dubious) to make the initial acquistion, and then pass much of it on to Capital One, thereby evading review of Capital One, including but not limited to CRA review. This should not be countenanced. This applications is not even listed in the FRB's H2A, but only the H2, thusly: “* 18C Not applicable Synovus Bank, Columbus, Georgia, to acquire 05/19/2017 certain assets and to assume the deposits of World's Foremost Bank Sidney, Nebraska” It does not mention the role of Capital One. In the New York City MSA in 2015, the most recent year for which HMDA data is available, for conventional home purchase loans Capital One denied the applications of whites 23% of the time, while denying African Africans fully 45% of the time, and Latinos even more, 46% of the time. This is unacceptable.
Meanwhile, Capital One is “closing branches in Laurel, Gaithersburg, Frederick and Merrifield.”
As to Synovus' Bank, in 2015 in the Atlanta GA MSA it made 53 home purchase loans to whites and only seven to African Americans, NONE to Latinos. In the Birmingham Alabama MSA it made 45 home purchase loans to whites and only three to African Americans. If the bank cites Synovus Mortgage, note that in the Charlotte NC MSA in 2015 for home purchase loans, it lend to whites but not African Americans much less Latinos. Fair Finance Watch will submit further comments in the extended comment period. On the current record, the application(s) should be denied."

May 1, 2017

After FFW Protest, Fed Cites Community Bank OCC Deal & Disparities, Rubber-stamps Merger

By Matthew R. Lee

NEW YORK, April 26 – At what point does bank executives' spin to investors and the media become more than misleading? Take Community Bank System (NYSE: CBU), which received on March 13 consumer lending questions on top of the nine earlier questions from the Federal Reserve on its proposal to acquire Merchants, after its CEO derided issues Fair Finance Watch raised about the proposal. Despite scanty responses and records, the Federal Reserve six weeks later on April 26 approved the application, reciting that "a commenter objected to the proposal on the basis of alleged disparities in the number of conventional home purchase loans, refinance home purchase loans, or home improvement loans offered to African American or Hispanic borrowers, as compared to white borrowers, by Community Bank in the Buffalo-Cheektowaga Niagara Falls, New York, Metropolitan Statistical Area (“Buffalo/Niagara MSA”) and
the Syracuse, New York, Metropolitan Statistical Area (“Syracuse MSA”) as reflected in data reported under the Home Mortgage Disclosure Act (“HMDA” for 2015." The disparities were and are extreme. The Fed's order claims "The Board is concerned when HMDA data reflect disparities in the rates of loan applications, originations, and denials among members of different racial or ethnic groups in local areas. These types of disparities may indicate weaknesses in the adequacy of policies and programs at an institution for meeting its obligations to extend credit fairly." The Fed even recites that "Community Bank’s
compliance with conditions imposed by the OCC in connection with Community’s 2015
acquisition of Oneida and the related merger of Oneida Savings Bank into Community
Bank.33 As a condition of approval of the bank merger application, the OCC required
that Community Bank create a CRA AA Delineation Policy and modify its AAs in
accordance with that policy." And? Finally, the Fed uses its illegitimate rule change slipped into the People's United order, to limit merger review. This is today's Fed. We'll have more on this.

April 24, 2017

Better late than never: "The Federal Reserve on Thursday announced two enforcement actions against Deutsche Bank AG that will require the bank to pay a combined $156.6 million in civil money penalties."

April 17, 2017

  Following the protest by Fair Finance Watch, the Federal Reserve has asked TIAA-CREF a fifth round of questions: "Provide an update on EverBank’s CRA activities since its last publicly available CRA Performance Evaluation. Your response should include any significant CRA initiatives undertaken, particularly with respect to credit and deposit products and retail banking services targeted toward low-to-moderate income geographies and individuals. In addition, provide information regarding community development lending, investments, and services in EverBank’s CRA assessment area since the last evaluation period, including the total number and dollar amount (except for community development services) and a brief description of the most significant community development loans, investments, and services." We'll have more on this.

April 10, 2017

 How sleazy is today's Federal Reserve? After they slipped a major reduction in merger reviews into a bank merger approval order, when Inner City Press / Fair Finance Watch formally challenged it in a Request for Reconsideration, the response was a voice mail that the Board has voted against the request. A phone call to ask what that meant was not returned. We'll have more on this.

April 3, 2017

ICP Timely Requests Reconsideration of Federal Reserve Loosening Merger Reviews Without Comment

By Matthew R. Lee

MAIN STREET, March 27 – The US Federal Reserve Board, which bears more than a little responsibility for the global financial crash from 2008 due to inattention to predatory lending including on mergers, has now further reduced its scrutiny of bank mergers, with little notice to date. Now Fair Finance Watch and Inner City Press has timely challenged the Federal Reserve's stealth reduction of scrutiny, in a timely request for reconsideration filed with the Federal Reserve on the evening of March 27, below. FFW and others including NCRC protested, and Inner City Press has Freedom of Information Act requests pending regarding, the application by People's United to acquire Suffolk County National Bank.

FFW showed that  in the the New York City MSA, "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."

When the Fed ruled on People's application, it added this: "In 2012, in its order approving Capital One Financial Corporation’s acquisition of certain U.S. operations of ING, the Board stated that a proposal that involves an acquisition of less than $2 billion in assets, that results in a firm with less than $25 billion in total assets, or that represents a corporate reorganization may be presumed not to raise material financial stability concerns absent evidence that the transaction would result in a significant increase in interconnectedness, complexity, cross-border activities, or other risk factors.  Since establishing this presumption, the Board’s experience has shown that proposals involving an acquisition of less than $10 billion in assets, or that result in a firm with less than $100 billion in total assets, are generally not likely to create institutions that pose systemic risks. Transactions below either of these asset thresholds have typically not involved, or resulted in, firms with activities, structures, and operations that are complex or opaque. Such transactions have also not materially increased the interconnectedness or complexity of the financial system. Accordingly, the Board now presumes that a proposal does not raise material financial stability concerns if the assets involved fall below either of the aforementioned size thresholds, absent evidence that the transaction would result in a significant increase in interconnectedness, complexity, cross-border activities, or other risk factors." Why wasn't this subject, at least, to notice and comment rulemaking? Why now? FFW and ICP have filed a "timely request for reconsideration, on behalf of timely commenters Fair Finance Watch and Inner City Press (ICP) of the Approval and Stealthy Announced Change in Financial Stability Review Presumptions in the Board's March 16 Approval of Application by People's  United Financial to acquire 100 percent of the voting shares of, and thereby merge with, Suffolk Bancorp, and thereby indirectly acquire voting shares of The Suffolk County National Bank, both in Riverhead, New York. While there are many portions of the approval order crying for reconsidering, to be clear ICP will herein have the following focus, on the Federal Reserve Board's misuse of this proceeding and approval order to purport to change its review of future applications, on the financial stability and inevitably related factors. What is the basis of the Federal Reserve determining that post-crisis scrutiny should be reduced? The above quoted portion of the order must be reconsidered, stripped out, and made subject to public comment. On fair lending issues, the Order does not appropriately address or take into account that in 2015 in the New York City MSA, People's United made 110 home purchase loans to whites and only ONE to an African American and only four to Latinos.
Again, this is systematic redlining; this proposed acquisition could not legitimately be approved and People's United should be referred for prosecution for redlining by the Department of Justice and CFPB. ICP said that a hearing was needed, and now after the Fed's insertion of a policy change into the Order, reiterates that." We'll have more on this.

March 27, 2017

  The Federal Reserve has chosen to make it nearly impossible to track open comment periods, still listing as pending such applications as that by NY Community Bank to acquire Astoria (since superseded by Sterling). We'll have more on this.

March 20, 2017

From the Fed: "This will acknowledge receipt of your electronic message dated and received by the Board's Freedom of Information Office on March 7, 2017, in which you request, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, the entirety of the March 7, 2017 submission in connection with the application by Community Bank System to acquire Merchants Bank. The Board makes every effort to fulfill requests in a timely manner; however, there may be delays in fulfilling complex requests or those that require consultation."

And nothing since.

March 13, 2017

The Federal Reserve has asked Simmons:

"1. The preamble to the Agreement and Plan of Merger by and between Simmons and Hardeman dated November 17, 2016 (“Agreement”), provides that certain directors and
executive officers of Hardeman have entered into voting agreements in connection with the merger. Provide copies of the voting agreements referenced as Exhibit A to the
Agreement.

2. Provide the Target’s Disclosure Memorandum and the Buyer’s Disclosure Memorandum as referenced in the Agreement.

3. Page 1 of Simmons’s additional information response dated February 22, 2017, provide that, upon consummation of the holding company merger, Messrs. Ed Woodside, Hunter
Simmons, Mike McGregor, and Kirk Goehring would join the Simmons organization as senior management officials. Discuss whether, upon joining the Simmons organization,
any of these individuals would also serve as a director or senior management official at any other banking organization, and if so, indicate the position(s) and organization(s) at
which the individual would serve. "

March 6, 2017

We note long time Board Secretary Robert deV. Frierson, with whom Inner City Press has exchanged many FOIA and merger comment letters, is retiring - enjoy and Ann Misback taking over April 2, 2017. The FOIAs and comments will continue!


After FFW Protest, Fed Sends Community Bank System 9 Questions, CEO Tryniski Trashes CRA

By Matthew R. Lee

NEW YORK, March 2 – At what point does bank executives' spin to investors and the media become more than misleading? Take Community Bank System (NYSE: CBU), which has now received nine additional questions from the Federal Reserve on its proposal to acquire Merchants, after its CEO derided issues Fair Finance Watch raised about the proposal.

  On its last proposal, CBSI bad-mouthed a Community Reinvestment Act protest even as it had to delay its Oneida deal. First, CBSI's "Hal Wentworth 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.'" Then the deal was significantly delayed, with CBSI pushing the date back.

  More spin:  CFO Scott Kingsley told the media that FFW's protest "is not the sole reason. We have other things that have to sequentially happen to get to the technological conversion in July. When we did not have a definitive answer from the Fed or other parties last week, that put the technological conversion at risk, so we opted not to go ahead.”

  This time, it went to the CEO Mark Tryniski, who in January 2017 told stock analysts that "despite the baseless protest filed with the Fed Reserve by a serial activist, we expect to close in the second" question. We'll see. Among the nine questions: "Community Bank states that, to the extent it does not intend to continue to offer certain loan products and services offered by Merchants Bank post-merger, it does not believe that not offering such products and services would have a significant impact on the target bank's communities. As an example, Community Bank cites the fact that Merchants Bank would no longer accept applications for FHA/VA loans (on behalf of a mortgage company), but that Community Bank would offer loan products and programs which are not currently offered by Merchants Bank that Community Bank believes are comparable and 'equally valuable' to its communities, such as FNMA's Home Ready Program, Community Bank's Affordable Housing Program, and the USDA loan program. Compare the features of FHA and VA loans for which applications are presently taken by Merchants Bank with the features of the products and programs that Community Bank asserts are comparable, including any features of FHA and VA loans that are not covered by Community Bank's offerings."  Watch this site.

February 27, 2017

   The Federal Reserve, confronted even with court settlements by banks, says it was without admission of guilt. From February 24: "FNB’s overdraft practices were found to be unfair trade practices resulting in unjust enrichment as part of a class-action litigation, Ord v. First National Bank of Pennsylvania, No. 2:12-cv-00766-AJS (W.D. Pa. dismissed June 21,
2013). The case was settled without any admission of wrongdoing by the parties. Final Judgment & Order of Dismissal with Prejudice at 4–5, Ord (No. 2:12-cv-00766-AJS). " We'll have more on this.

February 20, 2017

Coulda shoultd woulda will; the Fed barely reviews unless comments received. So...

 "First Bancorp (NASDAQ - FBNC), the parent company of First Bank, reports that it has received notification from the Federal Reserve Bank of Richmond that the Company's merger application to acquire Carolina Bank Holdings, Inc. ("Carolina Bank Holdings") has been approved. All regulatory approvals have now been received, and the holding company merger date is expected to be March 3, 2017."

February 13, 2017

Governor Tarullo will leave the Fed by April 5. And who will take his place? There are still FOIA improvements needed...

February 6, 2017

The Federal Reserve has asked United Bankshares, on its protested application to buy Cardinal,

"In its January 13, 2017, Letter Responding to the Request for Additional Information, United indicates there are currently two pending litigation matters against UB WV in  which allegations have been made involving consumer protection laws. Please provide additional information about these matters, including, at a minimum, the identity of the parties, the nature of the claims, the specific consumer protection laws implicated, the current posture of the litigation, and the anticipated time frame for disposition."

January 30, 2017

The Federal Reserve's anti-money laundering enforcement action against BB&T is far to vague. We'll have more on this.

January 23, 2017

  Among other comments, Fair Finance Watch has filed this:

On behalf of Inner City Press/Fair Finance Watch (ICP), this is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Application of Community Bank System to acquire Merchants Bancshares, Inc. and Merchants Bank. This first comment is timely:

Community Bank System proposes to acquire Merchants. But in the the Buffalo and Syracuse MSAs in 2015, the most recent year for which Home Mortgage Disclosure Act data is publicly available, Community Bank NA dramatically excluded people of color.

For conventional home purchase loans in the Buffalo MSA in 2015, Community Bank NA made 58 such loans to whites and NONE to African Americans. It denied the only application it received from an African American.

For refinance home purchase loans in the Buffalo MSA in 2015, Community Bank NA made 19 such loans to whites and NONE to African Americans or Latinos.

For home improvement loans in the Buffalo MSA in 2015, Community Bank NA made 100 such loans to whites and NONE to African Americans or Latinos.

This is outrageous.

In the Syracuse MSA in 2015, Community Bank NA made 155 conventional home purchase loans to whites and NONE to African Americans.

For refinance loans in the Syracuse MSA in 2015, Community Bank NA made 121 such loans to whites and NONE to African Americans. It denied the only application it received from an African American.

This is outrageous.

Also, “Vermont still has 6 other state-chartered banks, but they all serve small regions of the state.... The last state-chartered bank to merge with a federally-chartered bank was Chittenden Bank, which became part of the Connecticut-based People’s United Bank on Jan. 1, 2008.”

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

Nor should Community Bank Systems be permitted to acquire Northeast Retirement Services...


January 16, 2017

This was some questioning to / of the Federal Reserve...

January 9, 2017

The Federal Reserve has asked, after comments, about branches closings and consolidations:

"In response to Question 10 of the Bank Merger Act application, United indicates that it anticipates consolidating six UBVA branches into six Cardinal Bank branches and six Cardinal Bank branches into six UBVA branches, and is considering consolidating two additional branches. Exhibit L to Form 2070 indicates that United plans to consolidate six UBVA branches into six Cardinal Bank branches and seven Cardinal Bank branches into seven UBVA branches, and is considering consolidating two additional branches. Please provide clarification as to the number and location of branches to be consolidated or closed following the merger."
 
  We'll have more on this.

January 2, 2017

After Inner City Press / Fair Finance Watch requested TIAA's withheld fair lending exhibits under FOIA, the Fed between Christmas and New Years emailed a document - with the entire fair plan redacted...

December 26, 2016

This is UNacceptable:

December 22, 2016
 
Mr. Matthew R. Lee
Inner City Press / Fair Finance Watch

Re:       Freedom of Information Act Request No. F-2017-0058
 
Dear Mr. Lee,
 
This will acknowledge receipt of your electronic message dated December 10, 2016, and received by the Board's Freedom of Information Office on December 12, in which you request, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552, the entirety of the December 9, 2016 submission in connection with the Application by TIAA et al to acquire EverBank.
 
The Board makes every effort to fulfill requests in a timely manner; however, there may be delays in fulfilling complex requests or those that require consultation.

  The FFW-challenged application is still pending...

December 19, 2016

These are ones to watch:

Federal Reserve:

Chair: Janet L. Yellen, Term Expires February 3, 2018 (as Chair), January 31, 2024 (as Gov.)
Vice Chair: Stanley Fischer, Term Expires June 12, 2018 (as Vice Chair), January 31, 2020 (as Gov.)
Governor: Daniel K. Tarullo, Term Expires January 31, 2022
Governor: Jerome H. Powell, Term Expires January 31, 2028
Governor: Lael Brainard, Term Expires January 31, 2026
2 Governor Seats Currently Vacant

December 12, 2016

  The TIAA fight goes on - now they are trying to withhold fair lending information, which on December 10 we challeged:

or the entirety of the December 9, 2016 submission in connection with the Application by TIAA et al to acquire EverBank. As provided under the FRB's ex parte rules, the submission refers to “confidential” portions the withholding of which we are challenging with this FOIA request on, for example, “consumer compliance and fair lending compliance, as well as the Resultant Institution’s Fair and Responsible Practices Program.”

December 5, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

November 28, 2016

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

November 21, 2016

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

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

November 14, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

November 7, 2016

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

By Matthew R. Lee

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

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

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

October 31, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

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

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

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

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

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

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

October 24, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

October 17, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

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

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

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

Michael Patterson, director: $6,969,354.35

Scott Custer, CEO: $3,836,876.80

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

Joseph Towell, chairman: $2,705,434.65

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

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

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

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

Terry Earley, CFO: $1,030,739.45

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

See also:

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

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

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

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

October 10, 2016

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

By Matthew R. Lee

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

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

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

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

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

October 3, 2016

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

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

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

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

September 26, 2016

And now more questions from the Fed to BNC:

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

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

September 12, 2016

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

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

September 5, 2016

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


August 29, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

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

On BNC, Inner City Press / Fair Finance Watch has raised to the Federal Reserve:

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

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

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

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

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

  We'll have more on this.

August 22, 2016

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

 
August 15, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

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

August 8, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

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

August 1, 2016

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

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

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

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

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

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

 We'll have more on this.

July 25, 2016

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

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

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

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

July 18, 2016

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

July 11, 2016

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

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

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

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

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

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

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


Branches for which information is requested:

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

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

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

? Muskegon, 281 Seminole Road, Norton Shores, Michigan

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

? Portage, 800 East Milham, Portage, Michigan

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

July 4, 2016

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

June 27, 2016

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

June 20, 2016

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

June 13, 2016

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

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

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

  Watch this site.

June 6, 2016

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

By Matthew R. Lee

NEW YORK, June 2 -- The lack of seriousness in US bank regulation expends from the relatively smaller of mid-sized to the largest banks, with Goldman Sachs the most recent example.

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

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

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

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

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

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

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

May 30, 2016

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

May 23, 2016

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

May 16, 2016

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

 May 9, 2016

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

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

We'll have more on this...

May 2, 2016

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

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

April 25, 2016

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

By Matthew R. Lee

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

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

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

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

April 18, 2016
 
Mr. Matthew R. Lee
Inner City Press
PO Box 20047
New York, NY 10017
 
Re:       Freedom of Information Act Request No. F-2016-0152
 
Dear Mr. Lee,
 
On March 21, 2016, the Board of Governors (“Board”) received your electronic message dated March 20, pursuant to the Freedom of Information Act (“FOIA”), 5 U.S.C. § 552... Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response until May 2, 2016, in order to consult with two or more components of the Board having a substantial interest in the determination of the request.
 
If a determination can be made before May 2, 2016, we will respond to you promptly.  It is our policy to process FOIA requests as quickly as possible while ensuring that we disclose the requested information to the fullest extent of the law.
 
  So the documents should come in before May 16. Watch this site.

April 18, 2016

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

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

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

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

April 4, 2016

 Goldman Sachs ultimately on March 21 obtained Federal Reserve approval to buy $16 billion in insured deposits from GE Capital, and the Fed, documents  released to Inner City Press under the Freedom of Information Act (FOIA) show, is inappropriately bent on helping, including by closing its comment period...  The Federal Reserve has belatedly responded to Inner City Press / Fair Finance Watch's September 2 FOIA request, with some of its internal documents, many heavily redacted. FOIA letter here; FOIA documents released to ICP here, and embedded below.

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

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

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

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

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

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

Specifically, on July 13, the Fed sent Cohen a "request for additional information concerning the proposal by GS Bank to purchase certain assets and assume the deposit liabilities of GE Capital Bank." The proposed transaction was not publicly announced until August 13, and Goldman did not submitted its (pre-vetted) application until August 18.

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

It cannot be.

Even as redacted, the belatedly released documents show that on May 14 and May 18, Goldman Sachs and its outside counsel Rodgin Cohen of Sullivan & Cromwell told the Fed and its General Counsel Scott Alvarez of their plans for GE Capital Bank.

On May 28, the Fed met with Goldman which presented a "deck" of information about "Project Apple," much of it still redacted.

Likewise, the redactions from “Rodge's” May 29, 2015 letter are outrageous, and appealed.A similar letter was submitted by Cohen on June 16, attaching a letter the Fed has redacted in full from Goldman Sachs' Esta E. Stecher, redactions from which also appealed.

Scott Alvarez took the conversation onto the telephone, not subject to FOIA, on June 16. His accompanying e-mails, as redacted, only say "Thanks! Scott." This evasion of FOIA and of the Fed' stated process should be addressed in your ruling on this request for reconsideration.

On June 26, the Fed's Alison Thro wrote that "Rodgin Cohen was in today briefly to discuss, among other things, GS’s plans to acquire the deposits of GE’s ILC. He asked what the next steps might be." What were those "other things"? And by conducting this “review” prior to any public notice, the Fed is evading the ex-parte rules. This too should be addressed - and corrected - in connection with this.

On July 13, the Fed sent Cohen a "request for additional information concerning the proposal by GS Bank to purchase certain assets and assume the deposit liabilities of GE Capital Bank." Why was this sent BEFORE ANY APPLICATION or public notice? This must be addressed.

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

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

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

The reference to "fairness and transparency" was apparently without irony. But this announcement was postponed. Alvarez wrote on July 20 that "Rodge just sent a note that GS wants to postpone signing the deal with GE and the announcement for 2 to 3 weeks." More review continued, outside of public scrutiny. Alvarez made himself available on Sunday, July 26. But to no avail.

The deal was publicly announced on August 13 and Goldman Sachs on August 18 submitted the apparently pre-vetted application. This was contrary to law, and now to the Order.

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

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

March 28, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

March 21, 2016

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

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

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

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

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

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

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

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

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

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

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

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

By Matthew R. Lee

NEW YORK, March 1 -- The lack of seriousness in US bank regulation expends from the relatively smaller of mid-sized to the largest banks, with Goldman Sachs the most recent example.

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

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

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

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

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

February 29, 2016

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

By Matthew R. Lee

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

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

 Inner City Press on February 23 submitted a FOIA request:

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

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

February 22, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

 But now it does...

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

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

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

February 15, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

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

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

February 8, 2016

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

February 1, 2016

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

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

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

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

January 25, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

  That has been submitted, and receipt confirmed.

January 18, 2016

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

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

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

January 11, 2016

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

By Matthew R. Lee

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

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

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

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

January 4, 2016

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

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

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

December 28, 2015

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

December 21, 2015

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

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

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

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

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

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

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

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

December 14, 2015

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

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

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

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

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

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

December 7, 2015

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

November 30, 2015

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

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

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

November 23, 2015

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

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

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

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

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

November 23, 2015

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

By Matthew R. Lee

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

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

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

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

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

November 16, 2015

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

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

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

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

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

November 9, 2015

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

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

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

November 2, 2015

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

October 26, 2015

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

By Matthew R. Lee, Exclusive

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

October 19, 2015

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

By Matthew R. Lee

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

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

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

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

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

October 12, 2015

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

By Matthew R. Lee

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

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

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

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

October 5, 2015

As Fed Blesses Hudson City Discrimination, Silent on Goldman Sachs

By Matthew R. Lee

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

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

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

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

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

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

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

September 28, 2015

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

By Matthew R. Lee

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

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

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

 NYSDFS Senior Attorney George Bogdan wrote:

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

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

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

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

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

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

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

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

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

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

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

September 21, 2015

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

September 14, 2015

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

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

September 7, 2015

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

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

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

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

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

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

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

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

August 31, 2015

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

August 24, 2015

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

August 17, 2015

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

August 10, 2015

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

By Matthew R. Lee

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

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

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

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

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

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

August 3, 2015

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

By Matthew R. Lee

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

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

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

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

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

July 27, 2015

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

By Matthew R. Lee

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

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

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

July 20, 2015

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

By Matthew R. Lee

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

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

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

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

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

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

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

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

July 13, 2015

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

July 6, 2015

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

By Matthew R. Lee

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

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

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

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

  Now the Federal Reserve has asked RBC:

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

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

June 29, 2015

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

June 22, 2015

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

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

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

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

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

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

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

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

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

June 15, 2015

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

June 8, 2015

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

By Matthew R. Lee

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

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

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

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

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

June 1, 2015

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

May 25, 2015

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

May 18, 2015

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

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

May 11, 2015

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

By Matthew Russell Lee

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

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

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

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

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

May 4, 2015

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

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

April 20, 2015

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

April 13, 2015

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

April 6, 2015

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

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

So we send this reply:

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

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

March 30, 2015

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

March 23, 2015

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

March 16, 2015

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

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

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

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

Watch this site - there's more.

March 9, 2015

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

March 2, 2015

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

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

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

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

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

February 23, 2015

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

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

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

February 9, 2015

From a (much) belated Fed FOIA response:

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

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

February 2, 2015

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

January 26, 2015

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

January 19, 2015

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

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

By Matthew Russell Lee

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

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

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

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

January 5, 2015

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

December 29, 2014

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

By Matthew Russell Lee

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

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

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

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

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

December 22, 2014

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

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

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

December 15, 2014

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

December 8, 2014

As CIT Tells Fed OneWest Will Apply to GSEs

By Matthew Russell Lee

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

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

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

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

December 1, 2014

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

By Matthew Russell Lee

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

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

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

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

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

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

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

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

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

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

  We'll see.

November 24, 2014

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

By Matthew Russell Lee

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

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

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

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

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

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

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

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

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

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

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

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

  We will report on the responses, upon receipt.

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

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

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

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

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

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

November 17, 2014

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

November 10, 2014

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

By Matthew Russell Lee

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

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

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

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

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

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

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

November 3, 2014

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

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

October 27, 2014

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

October 20, 2014

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

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

October 13, 2014

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

By Matthew Russell Lee

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

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

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

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

October 6, 2014

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

September 29, 2014

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

By Matthew Russell Lee

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

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

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

FOIA Request No. F-2014-00380

Dear Mr. Lee,

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

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

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

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

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

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

September 22, 2014

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

September 15, 2014

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

September 8, 2014

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

Dear Mr. Lee,

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

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

Freedom of Information Office, Federal Reserve Board

September 1, 2014

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

August 25, 2014

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

August 18, 2014

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

August 11, 2014

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

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

August 4, 2014

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

Ya don't say...

July 28, 2014

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

July 21, 2014

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

July 14, 2014

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

July 7, 2014

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

By Matthew Russell Lee

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

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

  So what, really, was learned?

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

June 30, 2014

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

June 23, 2014

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

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

June 16, 2014

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

What about the Community Reinvestment Act?

June 9, 2014

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

June 2, 2014

ICP / Fair Finance Watch filed this with the Fed:

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

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

Midland States Bank Acquisition of St. Louis Bank Continues

Published on May 16 2014 5:41 am

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

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

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

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

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

Dear Mr. Lee,

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

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

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

Thank you,

Freedom of Information Office

Federal Reserve Board

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

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

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

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

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

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

May 26, 2014

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

May 19, 2014

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

May 12, 2014

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

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

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

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

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

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

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

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

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

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

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

After the Board's four-Governor order

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

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

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

May 5, 2014

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

April 28, 2014

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

April 21, 2014

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

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

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

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

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

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

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

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

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

Since April 1, consider also:

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

and

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

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

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

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

April 14, 2014

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

April 12, 2014

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

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

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

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

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

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

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

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

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

I am out of the office until March 31.

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

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

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

Dear Mr. Lee:

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

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

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

Dear Mr. Lee:

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

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

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

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

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

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

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

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

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

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

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

Very Truly Yours,

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

April 7, 2014

From the Federal Reserve's Umpqua - Sterling order:

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

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

March 31, 2014

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

March 24, 2014

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

March 17, 2014

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

March 10, 2014

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

March 3, 2014

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

February 24, 2014

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

February 17, 2014

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

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

February 10, 2014

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

February 3, 2014

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

January 27, 2014

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

January 20, 2014

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

January 13, 2014

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

January 6, 2014

On January 3, the Federal Reserve announced that "the Board has enlisted the services of executive recruiting firm DiversifiedSearch to assemble a broad and diverse pool of candidates, both internal and external, from which to select Ms. [Sandra] Braunstein's successor." Given the financial industry's domination of the rest of the Federal Reserve System including several Governors, we believe that consumers and community groups should play a role in the selection process. Watch this site.

December 30, 2013

Another step at the Fed, on United: United has committed that, at the next CRA examination following consummation of the merger with VCB and consistent with the combined organization’s capacity and opportunities for making qualified lending and investments, the combined organization will demonstrate that it has engaged in levels of qualified lending and investments, home mortgage lending, small business lending, and community development lending and investments in low- and moderate-income communities in the Northern Virginia portion of United’s Multistate CSA assessment area, that exceed United’s improved performance in 2012. In addition, within thirty (30) days of consummation, United will develop a program, to apply across all assessment areas of the combined organization, with the objective of producing results exceeding United’s improved performance in 2012. United will submit the program to the Reserve Bank for review and implement the program across the combined organization’s assessment areas."

December 23, 2013

There are those who wonder, rightly, whether a Vice Chair of the Federal Reserve should be one who worked at Citigroup....

December 16, 2013

Asked about Inner City Press / Fair Finance Watch's commebts to the Federal Reserve about the lending record of Michigan's Mercantile Bank and its proposed acquisition of FirstBank, Fed spokesperson Susan Stawick replied, "I’m afraid I’m not able to speak specifically about the status of the timetable for this application. But I can tell you that Federal Reserve staff is performing due diligence regarding the concerns that have been expressed about the merger.”

Now, Mercantile has gone low. Its submissions to the Fed have gotten shrill; it has reached out to individual borrowers of color (and to ostensible civil rights and even religious groupings) asking them for letters to CEO Michael Price to give the Fed about how they never felt discriminated against. Click here for one sample letter: http://www.innercitypress.org/mercbankasia120213.pdf

This approach cannot be allowed to prevail. Watch this site.

December 9, 2013

The Fed's Investors - Roma order says that

"as a condition of its approval, the Board has determined that the audit committee of the board of directors of Investors Bancorp must issue a written report to the board of directors of Investors Bancorp that shall include: an assessment of Investors Bank’s consumer compliance risk systems, processes, and procedures; an assessment of compliance with any reports or recommendations made by any state or federal agency issued in the last five years with respect to consumer compliance; and recommendations for improving the consumer compliance risk program, if necessary."

This is a rare condition for the Federal Reserve to impose, at least on consumer compliance. But as Inner City Press' March 1 comment set forth, in the New York City Metropolitan Statistical Area in 2011, Investors made 220 home purchase loans to whites, and only two such loans to African Americans. That's hard to do in New York.

But will the Fed follow up on compliance? Will there be transparency? Watch this site.

December 2, 2013

The Federal Reserve and Wal-Mart: the Fed last week approved that "Green Dot Bank proposes to acquire assets and assume liabilities related to GPR cards issued by GECRB, sold at U.S.-based Wal-Mart stores and online through a website for the prepaid debit cards, and serviced by Green Dot pursuant to an agreement among the parties initially entered into in 2006. As a result of the proposed transaction, Green Dot Bank would replace GECRB as the issuer of Wal-Mart Cards." Abuse?

November 25, 2013

Inner City Press / Fair Finance Watch commented on Mercantile Bank's application to the Fed to acquire First Bank, based on disparate lending in Michigan. Now (November 20) Mercantile argues against the Fed having extended its review, arguing that to go beyond December 31 might mean First Bank would have have file an SEC Form 10-K for 2013. But what would giving in to this kind of argument mean for CRA? Does the Fed give in to these kind of arguments?

November 18, 2013

Michigan's Mercantile, trying to buy FirstBank, has responded to the Federal Reserve but withheld from Inner City Press three exhibits in their entirety, while telling the Fed they want to close the deal so to set up a conference call. Inner City Press contests the withholding, and any "ex parte" call, having now formally asked to be be notified of and allowed to be on any such call.

Meanwhile ex-regulator Tim Geithner is cashing out to private equity firm Warburg Pincus -- which has at least a 20% stake in Sterling, the Spokane-based bank that Umpqua has applied to the Federal Reserve to acquire for $2 billion. So $400 million of that would go to Warburg Pincus. This insider deal, Inner City Press / Fair Finance Watch has commented on, including on Home Mortgage Disclosure Act disparities and prospective branch closings. Watch this site.

November 11, 2013

Two weeks after Inner City Press / Fair Finance Watch filed comments on the proposed acquisition by Mercantile or FirstBank, the Federal Reserve on November 6 asked Mercantile some questions, including about CRA and fair lending, here: http://www.innercitypress.org/frb1mercbank110613.pdf

They were given eight business days to answer (and send a copy); their shareholders meet on the proposal on December 12...

Another challenge we're watching is to to application of Midland States Bancorp of Effingham, Illinois, to acquire Heartland Bank, filed from St. Louis, Missouri....

November 4, 2013

So Goldman Sachs' bank has been given an "Outstanding" CRA rating by the Federal Reserve and NYDFS, trumpeted in the Wall Street Journal. GS is given CRA credit for lending to the CitiBank program. But since the bike racks are all below 60th Street in Manhattan and in gentrified or gentrifying parts of Brooklyn -- a veritable redlining map -- why does this get CRA credit? It's a scam...

October 28, 2013

This has caught our eye: Carmen Segarra, a former senior examiner at the New York Fed filed a wrongful termination lawsuit saying she was fired after her supervisors asked her to change her findings on Goldman Sachs and she refused. "The New York Fed is now asking the judge to seal the case, arguing that the Fed is not a public institution and therefore not bound by the Freedom of Information Act." What? The Fed responds to FOIA requests all the time...

October 21, 2013

Last week's Intelligence Squared debate on breaking up the big banks featured "one of America's most outspoken Federal Reserve presidents, Richard Fisher"- on the side of breaking banks up. So what's he doing about it?

October 14, 2013

Yellen is the pick. Hopefully unlike Bernanke she understands that enforcing the Community Reinvestment Act ON merger applications is the law...

October 7, 2013

Even amid the government shutdown, the Fed keeps going -- it raises its funds independently...

September 30, 2013

The Federal Reserve Board seems to not know much about how banks in Chile -- like Banco de Creditor e Inversiones, trying to buy City National Bank of Florida -- are regulated. So why let them in?

September 23, 2013

So for JPMorgan Chase's sleaze, the Fed fines them only $200 million out of $920 million. And the beat goes on.

September 16, 2013

How can Larry Summers be considered to head the Fed? Questions will be asked. Watch this site.

September 9, 2013

Blast from the past: when Adams Bank and Trust applied to open a new branch in Nebraska, the Federal Reserve Board got "public comments received from prospective competing banks in Colby and from residents of the surrounding areas. The commenters assert that their community’s demographic and economic characteristics would not profitably support another branch and that the area’s financial services needs are adequately met by the financial institutions currently operating there." Saying "we don't want more banks" was one of the bases for the "convenience and needs" concept in US banking law...

September 2, 2013

The Federal Reserve has belatedly sent Inner City Press / Fair Finance Watch copies of letters it sent to M&T about its Hudson City Savings Bank -- the letters are directed to former Fed legal staffer Patricia Robinson, now representing M&T (and others) at Wachtell Lipton....

August 26, 2013

Inner City Press / Fair Finance Watch has raised to the Federal Reserve: How is the public to know of this newspaper notice, if they do not happen to buy and closely read the particular newspaper the Banks publish the notice?

We note that the Fed's H2A could and should but does not include the actual comment period. In this way, the public is being unnecessarily misled.

In the past when the Federal Reserve System published Reserve Bank's Weekly Bulletins, they would list the Federal Register AND the newspaper notice period. While we understand that Federal Register notice could not easily be re-published in cases like this, there is no reason that the Fed cannot keep its online H2A website current.

Watch this site.

August 19, 2013

Despite being bailed out by the public and some now waning populist rhetoric from Washington, the continuing bank merger proposals show no concern for the public or for job loss. Why should they, when President Obama considers Larry Summer, on the Board of Directors of the no-doc (and thus subprime) Lending Club, to head the Federal Reserve?

August 12, 2013

When Inner City Press / Fair Finance Watch submitted a comment to the Federal Reserve Board in Washington on August 8, so far the only response is an "out of office" message from Juanetta Price. We know things are slow, but come on...

August 5, 2013

So it's down to Larry Summers, Janet Yellen and Donald Kohn...

July 29, 2013

So Larry Summers has been "speaking at internal meetings at Citi beginning in 2012, Mr. Summers attended small gatherings of clients 'where he provides insight on a broad range of topics, including the domestic and global economy,' a Citigroup spokesman said. The bank wouldn't say how much it is paying him," per Damian Paletta. Next!

It's worth noting, as Inner City Press / Fair Finance Watch did, that Fed Governor Jerome Powell, denier of FOIA appeals, was previously with Deutsche Bank and the Carlyle Group...

July 22, 2013

So the Fed belatedly says it "is reviewing the 2003 determination that certain commodity activities are complementary to financial activities and thus permissible for bank holding companies." It all goes back to Citigroup and Phibro in 2003, or really to the Fed's lawless 2008 approval of Citi - Travelers. Full circle?

July 15, 2013

Governor Elizabeth “Betsy” Duke is leaving the Fed at the end of August. Back on May 28, 2007 we reported that “Duke listed major holdings of a previous employer, Wachovia Corp., in financial disclosure forms filed in conjunction with her nomination to join the Fed Board. According to the disclosure forms, released Friday by the Office of Government Ethics, Duke reported holdings of Wachovia stock valued at between $5,000,001 and $25 million. She also reported holding Wachovia stock options.”

July 8, 2013

So Governor Jerome H. Powell gave a speech in New York last Tuesday at the reception for Deutsche Bundesbank. No surprised - he used to work for Deutsche Bank.... Bundes, indeed.

Deutsche Bank, which got involved as a direct subprime lender and as a trustee, has been accused by the City of Los Angeles of facilitating illegal evictions. Its attempts to get the case dismissed were rejected in April by the court.

And so now a settlement for a mere $10 million, of which Deutsche Bank brags it is not paying anything, that would be the services and the securitization trusts. When does immunity become impunity?

July 1, 2013

Does the Federal Reserve have a typo, or is there another Investors Bancorp application?

Investors Bancorp, Inc. and Investors Bancorp, MHC., both of Short Hills, New Jersey (2 of 2) and thereby engage in operating a savings association pursuant to Section 225.28(b)(ii) of Regulation Y. 4 New York 07/08/2013

Investors Bancorp, MHC and Investors Bancorp, Inc., both in Short Hills, New Jersey to acquire Roma Financial Corporation MHC, & Roma Financial Corporation, Robbinsville, NJ, & indirectly acquire Roma Bank, Robbinsville, NJ, &d RomAsia Bank, South Brunswick Township, NJ & engage in operating savings associations -- 225.28(b)(4)(ii) 4 New York 03/01/2013

June 24, 2013

M&T's (cheap) anti money laundering deal with the Fed will probably move the deal along faster -- but the deal makes it pretty clear that the money laundering loophole is in Wilmington Trust, which the Fed let M&T buy in 2011.

So what does it say about the Fed's merger reviews? The Fed should come up with a plan to improve itself, in 60 days (and approve no merger during that time.) Compare the Fed not even fining M&T, while state regulators last week fined even an accounting firm which helped a bank (Standard Chartered) conceal money laundering...

June 17, 2013

How can it be that the third most recent "News" on the Federal Reserve's web site is a presentation by Ben Bernanke in March 2012 -- yes, 2012? http://www.federalreserve.gov/newsevents/default.htm

June 10, 2013

Fed governor Sarah Bloom Raskin went to Ohio, spoke of growing up in a town without a bank, then said "Let's talk about the importance of timely implementation of rules based on one set of international agreements--the Basel III framework... I fully support this goal, because the financial crisis demonstrated, among other things, the need for robust capital at banks of all sizes... Since Basel III sets a final deadline for implementation of 2019, one might ask why it is so imperative to act sooner."

Click here for Inner City Press' review of Tower of Basel.

June 3, 2013

So Guido Hinojosa Cardosa now tells the Fed that Anchor Bank would NOT be included in any reporting to the Bolivian regulators. What ever happened to comprehensive, consolidated HOME COUNTRY supervision?

May 27, 2013

So the Federal Reserve has belatedly on May 22 auto-confirmed receipt of ICP's May 17 comments on the CRA Q&A. Now what?

May 20, 2013

Check this out - more delay:

"On April 18, 2013, the Board of Governors (Board) received your electronic message dated April 17, 2013, pursuant to the Freedom of Information Act (FOIA), 5 U.S.C. § 552, for records pertaining to the following:

all records related to the M&T - Hudson proceeding, which ICP timely protested, which have not yet been provided to ICP under the FRS' rules against ex parte communications. . . this new FOIA request [is] for all records concerning the proceeding and the FRS' review, including all non-exempt portions of communications between the FRS and M&T, since the date ICP protested the application until the date of the FRS' response to this FOIA request.

Pursuant to section (a)(6)(B)(i) of the FOIA, we are extending the period for our response "

May 13, 2013

Oops! Rust Consulting short-changed those already ripped off on servicing by Goldman Sachs and Morgan Stanley. Hear the Fed scramble: http://www.federalreserve.gov/newsevents/press/bcreg/20130508a.htm

May 6, 2013

The Fed's hi-falutin predators:

"Payments to more than 220,000 borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley are scheduled to begin on Friday, May 3 following an agreement announced earlier this year by the Federal Reserve Board. Under the agreement, $247 million will be made in direct payments to borrowers whose homes were at any stage of the foreclosure process in 2009 and 2010 with the former subsidiaries of Goldman Sachs (Litton Loan Servicing LP) and Morgan Stanley (Saxon Mortgage Services, Inc.)."

April 29, 2013

Investors Bank tries to explain its weak lending to African Americans and Latinos to the Fed's Helen Troy, as it tried to Brian Steffey, by saying it does not originate loans -- Investors Home Mortgage does. But isn't it responsible?

Meanwhile the FDIC has unilaterally extended its time to respond under FOIA, to May 10.

April 22, 2013

Given that Inner City Press / Fair Finance Watch has challenged M&T - Hudson City Savings Bank since last Fall, how can it be that the Fed didn't give it documents about the regulatory issues in the applications process? Now Inner City Press has filed a separate FOIA request, beyond the rules against ex parte communications which the Fed, it seems, doesn't comply with...

April 15, 2013

After Inner City Press challenged the application of Guido Hinojosa to gain control of Anchor Commercial Bank, the Fed did ask Hinojosa some questions about his resignation from Banco de la Paz, which then fell apart. The response, just in, calls it a family affair. Indeed...

April 8, 2013

The Federal Reserve, as of April 5, lists on 78 pending applications subject to public comment under the BHCA, CIBC Act and HOLA -- a near record low. And some that are still listed have already been rubber stamps -- like First Merit....

April 1, 2013

On FirstMerit, the Fed said “The commenter referred to press releases issued by two rating agencies raising concerns regarding possible integration difficulties and FirstMerit’s entry into new markets. The commenter also referred to outstanding litigation associated with the proposed transaction.” The commenter was ICP Fair Finance Watch. But as the Fed was asked recently at the Capital Hilton, why doesn't the Fed name commenters? Is it only to try to deny standing?

March 25, 2013

When Federal Reserve Board Governor Sarah Bloom Raskin cited the “broken windows” theory, it hearkened back to James Q. Wilson and yes, Rudy Giuliani. But she took it in a different direction: what about when it's the banks who're breaking windows? Well what about it? If Bronxites get arrested to jumping the subway turnstile, what about destroying the world economy?

On March 22 an NCRC discussion ranged from the Federal Reserve withholding too much information under the Freedom of Information Act to allowing former Legal Division staffers to re-appear advocating before the people they used to work with, or under.

While we've always liked her, the case in point was Patricia Robinson, formerly of Fed legal, now representing banks on mergers. Is it appropriate? How to know, given the redactions? We will continue on this.

March 18, 2013

When the Federal Reserve granted a public hearing on Bank of Hawaii's plan to close its branches in American Samoa, leaving it in the hands of ANZ, it looks like the Fed did not provide correct public notice. A search on FederalReserve.gov press releases for Samoa finds nothing. For shame...

March 11, 2013

Ah, Investors... A response from the Federal Reserve “Board’s Freedom of Information office on March 1, 2013. Board staff are currently processing the remainder of your FOIA request, which seeks the confidential portions of the Notice and seeks any and all records reflecting FRS communications with the applicant regarding the proposal. The Office of the Secretary will send you a separate response addressing the remainder of the FOIA request."

March 4, 2013

With Bank of Hawaii trying to close over 50% of the branches in American Samoa, why would the Federal Reserve Bank of San Francisco gave a post to Bank of Hawaii chairman Peter Ho. We say, to remove taint of conflict of interest, now MUST hold public hearing on the planned American Samoa branch closures....

February 25, 2013

The Federal Reserve tells Inner City Press that

“To facilitate secure email exchanges with the Federal Reserve, please see the attached file and link that contain instructions for registering with the Zix e-mail system. The web address is

https:// [THE WEB ADDRESS IS NOT RESPONSIVE TO YOUR FOIA REQUEST]”

Yes it is...

February 18, 2013

Hitting a new low, Customers Bancorp on its application to the Federal Reserve to acquire Acacia Federal Savings Bank has tried to withhold from Inner City Press the entirety of its response to Fed questions. We will be pursuing - the documents, and Customers Bancorp.

Meanwhile the Fed has reportedly sent a February 11 Q&A to Live Oak, with a confidential attachment -- but none of it, even the non-confidential portion, was sent to Inner City Press. Watch this site.

February 11, 2013

And now we know: while the Federal Reserve told community groups that the comment period on Live Oak – Government Loan Solutions, published in the Federal Register, had been in error, internally the lawyer for Live Oak asked the Fed on December 21, “Are we close on the Live Oak notice? I know the comment period has not closed quite yet, but I will be out of the office most of next week, so I thought I would check in this morning.”

The comment period still open, but the Fed “close” to deciding and approving anyway. This is shameful. An appeal is being filed with the withheld information, presumably even more shameful.

February 4, 2013

Talk about grading of the curve: last Fall Inner City Press / Fair Finance Watch began challenging Customers Bancorp, then on its proposal to buy Acacia. Now, Customers tells the Federal Reserve that "Fair Lending training is required annually of all employees with customer contact. It is administered via an online, self-paced course through the Edcomm Learning Management System. The employee is required to demonstrate adequate mastery of the course materials by completing a test at the conclusion of the course and obtaining a passing grade (minimum 80% correct).

80% is good enough for fair lending? For the Federal Reserve?

January 28, 2013

More Fed FOIA shenanigans:

This is a timely FOIA appeal to the Federal Reserve Board's January 11 partial denial of my FOIA request of some 11 weeks earlier for all portions of the applications / notices by Guido Hinojoso to acquire control of Anchor Commercial Bank for which Guido Hinojosa and his outside counsel improperly requested confidential treatment.

Some of these arrived some eleven weeks later, but with redactions to basic managerial information such as the answer to "have you ever been dismissed from past employment" including in the banking field. Biographical, 2b. Similarly, the FRB has redacted all answers about past bank merger applications, if they were denied (Biographical 5) including a paragraph answer about Change in Control (5b) and lawsuits (5e). All such information must be released.

Still partially redacted Exhibit 1G lists $500,000 purchase of shares in Sunrise Bank in 2011, and $5,500,000 for Anchor Commercial Bank in 2012. But it is now 2013. Was the gun jumped? Has this plan changed? The rest of the page is blacked out and must be released, and the comment period extended.

The "relationship to Notificant" column for both Patricio Hinojosa Jimenez and Jorge Hinojosa Jimenez is redacted - why? A member of CBIFSA's board of directors is redacted in full -- why? These must be released.

The Recitals, Definitions and much of "Subscription" of the Subscription Agreement are redacted - why? This must be released.

In "Turnaround," the "Summary of the Bank's Condition" is redacted - this must be released.

The "Commitments" (Confidential Exhibit 3) are withheld - but must be released. ICP is appealing this and all other redactions and withholdings.

The Deputy Secretary's letter (the "Denial") cites exemptions 4 and 6 and says their application to the heavily redacted pages provided is clear. It is not. Nor does the Denial state how many pages have been withheld in full.

January 21, 2013

Richmond Fed President Jeffrey Lacker has reiterated his claim that then-New York Federal Reserve President Timothy Geithner in 2007 notified Bank of America and other financial institutions that the U.S. central bank was considering lowering a critical interest rate.

January 21, 2013

Richmond Fed President Jeffrey Lacker has reiterated his claim that then-New York Federal Reserve President Timothy Geithner in 2007 notified Bank of America and other financial institutions that the U.S. central bank was considering lowering a critical interest rate.

January 14, 2013

Inner City Press has submitted a FOIA request to the Federal Reserve for all records related to the Federal Reserve System's comment period on Live Oak Bancshares' application to acquire Government Loan Solutions, Inc., of Cleveland, Ohio -- the initial comment period on which was said by the Fed to be January 4: http://www.ftc.gov/os/fedreg/2012/12/121210agencycollectionfrn.pdf

However at some later stage the Fed decided to shorten the comment period. We are specifically requesting all records concerning the change in comment date, as well as a full copy of Live Oak's application and all records reflecting the Federal Reserve System's communcations with or about Live Oak Bancshares or Government Loan Solutions for the past six months.

Watch this site.

January 7, 2013

The total lack of accountability of the Federal Reserve Board and of those it purports to regulate, for example Capital One which was fined $150 million in July 2012 for predatory practices, is on display in a Freedom of Information Act appeal denial issued on January 2 by Governor Jerome Powell, to Inner City Press.

Upholding in full the withholding of over 2000 pages of records related to Capital One's compliance or non-compliance with commitments it made during its NCRC protested purchases of ING DIRECT and HSBC's subprime credit card operations, Powell ruled that not one page, or even a portion of a page, would be released.

This is at odds, for example, with FOIA appeal responses obtained this year by Inner City Press from other Federal agencies. In other FOIA news, Inner City Press is a media amicus in this just filed brief in McBurney v. Young, No. 12-17 of the US Supreme Court.

But the Federal Reserve, along with Capital One, will have to be addressed in 2013. Watch this site.

December 31, 2012

The Federal Reserve and its Governor Jerome H. Powell have hit new lows. After delaying more than 40 days to rule on Inner City Press' FOIA appeal of withholdings about M&T - Hudson City Bancorp, Powell in a seven page ruling finds that the Fed mis-invoked FOIA exemptions 6 and 8 -- but then refuses to release the information, now invoking exemption 4. This is much worse even than previous FOIA appeal rulings -- a new low. We'll have more on this.

December 24, 2012

Back in August, Inner City Press / Fair Finance Watch wrote to Customers Bancorp for its mortgage data, expressing some concerns. A month later, at the deadline, some data was provided. It was disparate and Inner City Press comments on Customers' Acacia application. There were questions from the Federal Reserve, some FOIA requests. Now, Customer's has passed back the drop-dead date from December 31 to January 31. But how do they know it will be approved by then?

December 17, 2012

The Federal Reserve has responded thusly to a Freedom of Information Act request from Inner City Press:

To facilitate secure email exchanges with the Federal Reserve, please see the attached file and link that

contain instructions for registering with the Zix e-mail system. The web address is

https:// WITHHELD

For shame... Also From FirstMerit's submission to the Federal Reserve about Citizens Republic, the entire "Environmental Matters" section is blacked out, in response to Inner City Press' FOIA request...

December 10, 2012

Sometimes credit has to be given where it's due. The Federal Reserve increasingly grants large banks insider status, discussing their merger ideas with them before they are announced, allowing the large banks to be represented by recent Federal Reserve Board lawyers.

But now on the smaller Customers Bancorp - Acacia proposal, the Federal Reserve left Inner City Press a voice mail before they called Customers, then had information that the Fed requested sent to Inner City Press. Customers has another merger application coming up -- we'll see if the disparities and weakness in their record can be made to change.

Meanwhile, Inner City Press has filed this;

This is a formal request under FOIA for the portions of FirstMerit's November 30 response to FRS questions which were not sent to Inner City Press.

To virtually every FRS question about its proposal to acquire Citizens Republic, which ICP timely challenged and made a still pending FOIA request about, FirstMerit states, See Confidential Exhibit. For example, to FRS Question 1, FirstMerit says only, "See Confidential Exhibit 1."

To FRS Question 2, FirstMerit says only, "See Confidential Exhibit 2."

To FRS Question 3, FirstMerit says, "See Confidential Exhibit 3."

To FRS Question 5, FirstMerit says, "See Confidential Exhibit 4."

To FRS Question 6, FirstMerit says, "See Confidential Exhibit 6."

To FRS Question 7, FirstMerit says only, "See Confidential Exhibit 6."

To FRS Question 8 and 9, FirstMerit says only, "See Confidential Exhibit 7."

To FRS Question 10, FirstMerit says only, "See Confidential Exhibit 8."

To FRS Question 11, FirstMerit says only, "See Confidential Exhibit 9."

To FRS Question 12, FirstMerit says only, "See Confidential Exhibit 10."

To FRS Question 14, FirstMerit says only, "See Confidential Exhibit 11."

This is outrageous, and makes a mockery of the FRS' stated Rules against Ex Parte Communications. This is a timely challenge to all of the withholdings.

December 3, 2012

What is it about the Federal Reserve System, that one submits comments on a merger by e-mail, then awaits for snail mail confirmation? See, FirstMerit, Cleveland Fed.

November 26, 2012

Hudson City Savings Bank, which M&T is trying to buy, is in New Jersey but not of it. When ICP / Fair Finance Watch challenged the deal, highlighting disparities in Hudson City's record, Hudson City had no response at all. Now it has been challenged from New Jersey as well. Meanwhile the Fed has had no response to the absurdity of it providing heavily redacted records of its pre-announcement meetings with M&T, an hour before the comment period was set to expire. This is not transparency. Watch this site.

November 19, 2012

So the Fed hauled off and approved Mitsubishi UFJ to acquire UnionBanCal -- in footnote 22 it recites that ICP / Fair Finance Watch timely raise the issue of the ongoing LIBOR scandal. The Fed says that "the Board is monitoring the course of the investigations and will consider, to the extent of the Board's authority, the findings in those investigations as they develop."

To the extent of the Fed's authority??

In in footnote 44, it says that the issue ICP raised about Tax Refund Loans is a thing of the past. If so, no thanks to the Fed...

November 12, 2012

Fed Met M&T 10 Days Before Hudson Deal, FOIA Shows, Appeal & Protest

By Matthew R. Lee, Exclusive

SOUTH BRONX, November 9 -- When M&T on August 27 announced biggest bank merger deal of the year, a $3.81 billion proposal to buy Hudson City Savings Bank, it was not the first time the Federal Reserve had heard about.

  Inner City Press, which has challenged M&T's application under the Community Reinvestment Act, on November 9 got a belated Freedom of Information Act response from the Federal Reserve Board, less than two hours before the Fed said the extended comment period would close.

  The documents released to Inner City Press show that on August 17, a full ten days before the public announcement, Federal Reserve Bank of New York official John Ricketti wrote to five others within the Fed:

"Wilmers called me this afternoon to inform me that M&T is looking to acquire M&T. [sic] He will be talking to his board about the acquisition at next Tuesday's board meeting and asked to come in Wednesday to talk to us (we're setting something up for late Wednesday afternoon). I'll be up in Buffalo for the board meeting to discuss the [REDACTED] and expect to learn more from him Monday night (I have a one-on-one meeting with him)."

  After that, much is redacted. Click here to view.

   The Fed advised M&T that its application to buy Hudson would probably be protested -- accurately, given that Hudson City in 2011, for conventional home purchase loans in the New York City Metropolitan Statistical Area, to make 765 such loans to whites and only FIVE to African Americans.

  Of this, a Fed memo of August 24 said "this will require review of any issues that are raised and [REDACTED].

 To view, click on cover email, and talking points One and Two.

  After the August 17 contact but before the proposal was announced, the Fed met on August 22 from 4:30 to 5:30 with "Wilmers" and Rene Jones, Michael Pinto and outside council Rodgin Cohen.

  A slide presentation was made, much of which including on Due Diligence and Complexity has been withheld.

  After the meeting, the New York Fed's Ivan Hurwitz sent a memo to the Fed in Washington, most of which has been blacked out.

  On August 24, the Fed's John Ricketti wrote another memo, with talking points, about his meeting with Rodgin Cohen and Rene Jones, much of its redacted.

Then on August 27, Cohen [Rodge] called the Fed's Tom Baxter, and Wilmer called "Dudley," both summaries redacted.

After the deal was announced, M&T had more meetings with the Fed on September 7. Only after they submitted an application did Inner City Press submitted a FOIA request on October 2, and an initial protest, on October 7.

Now Inner City Press has timely requested a further extension of the comment period, to review the documents so belatedly released, and to appeal what is being withheld.

Withheld is the substantive part of "Confidential" Exhibit O, what M&T will actually PAY to Merger Sub, and nearly all of the anti-money laundering program, material changes and due diligence findings. The Board Resolutions and Agreement and Plan of Merger are all blacked out, which is ridiculous.

November 5, 2012

So why hasn't the Fed asked, or M&T answered, questions about its application to acquire Hudson City Savings Bank? We are waiting...

October 29, 2012

The Fed has yet to address its revolving door. The response from M&T's outside counsel to ICP's October 7 protest was signed by a former FRB staff attorney who worked on mergers, with those still there. With all due respect, how is this appropriate? ICP has asked. Watch this site.

October 22, 2012

So when push comes to shove, the Federal Reserve doesn't even enforce the HHI Index. In Madison, Indiana last week, the Fed approved: "On consummation of the proposed merger, the resulting institution would remain the largest insured depository institution in the market, controlling deposits of approximately $249.7 million, which would represent approximately 46.3 percent of the market deposits. The HHI would increase by 234 points to 3284."

It fails the stated test, but the Fed approved it...

October 15, 2012

On October 5, Trustmark wrote to the Federal Reserve and said is was extending the planned closing date of the merger into 2013, because it has rightfully not obtained regulatory approval. Trustmark's lawyers mailed Inner City Press a copy of their email to the Fed -- we'll put it online here -- and then four days after the email, put out a press release about the extension (but not the protest).

On October 11, after its press release and uninformed reports of it, Trustmark answered another round of questions from the Federal Reserve. But the Fed has yet to extend the comment period. Watch this site.

October 8, 2012

Ah, if only Bernanke would apply his baseball paean to Davey Johnson to CRA, and see fit to deny a merger on CRA grounds from time to time, not least to "help in the long run"...

October 1, 2012

On appeal, and only on appeal, the Fed through Governor Jay Powell has deigned to belatedly release Trustmark's market share of deposits in Jackson, Mississippi and basic information about its anti money laundering program. Why was it withheld? What accountability is there for that?

September 24, 2012

From the troubling department of the revolving door: "Patrick M. Parkinson, former director of supervision for the Federal Reserve board, has joined Promontory Financial Group. After 31 years at the central bank, he will serve as a managing director at Promontory, consulting on regulatory and risk management issues in Washington.As the director of banking supervision and regulation from 2009 to 2011."

This should not be permitted.

September 17, 2012

So after the Fed handed out an approval without any mention or consideration of it, now it's reported that BB&T will close 21 branches in South Florida as it swallows BankAtlantic -- nine from BB&T and 12 from BankAtlantic. And, 365 jobs will be cut by Feb. 1, 2013...

Meanwhile Fed Governor Jerome H. Powell, formerly of Deutsche Bank and the Carlyle Group, has belatedly ruled on Inner City Press' June 30 FOIA appeal about Mitsubishi UFJ, largely rubber stamping the withholding but saying that some additional pages mis-withheld under Exemption 8 will be released. But these wrongfully withheld pages weren't included with Powell's letter, and haven't been e-mailed.

The Fed did belatedly send a copy of its August 27 to Trustmark, after it was raised. Better late than never.

September 10, 2012

After Inner City Press / Fair Finance Watch commented on Trustmark's application to acquire BankTrust, its law firm Wachtell Lipton replied, saying that a six to one denial rate disparity was okay. Now the Federal Reserve has asked Trustmark and Wachtell Lipton questions about the reply, including about Somerville Bank & Trust, who reviewed and claimed no discrimination? The responses are not convincing - and one wonders why the Fed didn't send ICP a copy of the questions, when they were asked...

September 3, 2012

The House Financial Services Committee has given the NY Fed a one-month extension, from September 1, to hand over thousands of documents related to the interest rate manipulation scandal. Many mega-banks including Citigroup, JPMorgan Chase, Barclays, UBS, Bank of America and Royal Bank of Scotland Group have been under investigation from regulators around the world over colluding to manipulate LIBOR.

Meanwhile the Federal Reserve Board has tried to withhold from Inner City Press information about the LIBOR scandal and Mitsubishi UFJ -- but Inner City Press has appealed under the Freedom of Information Act....

August 27, 2012:

So what does Trustmark's law firm Wachtell, Lipton have to say about its lending disparities? That the Office of the Comptroller found them okay. But here they are, as raised on the pending application to acquire BankTrust:

in its headquarters Metropolitan Statistical Area of Jackson, Mississippli in 2010, Trustmark for conventional home purchase loans had a denial rate for African Americans more than SIX TIMES HIGHER than for whites: 44.7% denial rate for African Americans, versus 7.3% for whites. It had a 100% denial rate for these and refinance loans for Latinos.

  MEANWHILE, the Federal Reserve in an August 22 FOIA response blacks out even Trustmark's market share of deposits in Jackson -- clearly public information. The Fed has hit a new low.

August 20, 2012

   Based on troubling disparities in mortgage lending in the Deep South,ICP  Fair Finance Watch has filed Community Reinvestment Act comments with the Federal Reserve on Mississippi-based Trustmark's application to acquire Mobile, Alabama based BankTrust.

  In its headquarters Metropolitan Statistical Area of Jackson, Mississippli in 2010, Trustmark for conventional home purchase loans had a denial rate for African Americans more than SIX TIMES HIGHER than for whites: 44.7% denial rate for African Americans, versus 7.3% for whites. It had a 100% denial rate for these and refinance loans for Latinos.

  In the Gulfport - Biloxi MSA in 2010, for conventional home purchase loans Trustmark made 40 loans to whites and only four to African Americans.

  In the Memphis MSA in 2010, for conventional home purchase loans Trustmark made 34 loans to whites and only two to African Americans.

In the Houston MSA in 2010, for conventional home purchase loans Trustmark made 35 loans to whites and NONE to African Americans.

  ICP  Fair Finance Watch has requested an evidentiary hearing into these lending patterns. The Federal Reserve Bank of Atlanta has confirmed receipt and asked the Fed's Freedom of Information Act unit and more importantly Trustmark and its outside counsel for responses. Watch this site.


August 13, 2012

So what WAS the Federal Reserve System doing about Standard Chartered for all this time?

August 6, 2012

Ah, impunity. The Fed's BB&T - BankAtlantic order, issued days after Governor Jerome Powell withheld yet more information from ICP on FOIA appeal, notes its protest

"referenced an SEC lawsuit alleging that the chairman of BA Bancorp had engaged in a pattern of misleading BA Bancorp’s investors through selective and untimely disclosures with respect to problem loans. The individuals named in the lawsuit will not be associated with BB&T or BankAtlantic after consummation of the proposed transaction."

So after untold scandals and the financial meltdown, the Fed's response? "Bygones."

July 30, 2012

Federal Reserve Seems to Pre-Approve Mergers, BB&T FOIA Release to Inner City Press Shows

By Matthew Russell Lee, Exclusive

SOUTH BRONX, July 29 -- This month the Federal Reserve Board quietly announced a willingness to pre-approve, or to indicate a willingness to approve, bank mergers proposals even before the public is made aware of them.

  To some, this shows how little the regulator has learned from the financial meltdown.

  Inner City Press has also just learned, via a Freedom of Information Act request and appeal, that the Fed has even this year been entertaining bank merger proposals under code names such as "Project Palm," assigned to BB&T's proposal with BankAtlantic.

   Click here for Governer Jerome Powell's response to Inner City Press' FOIA Appeal. Click here for some of the documents released. 

   The deal is still pending.

  When the Fed on July 11 announced the policy by a "Supervisory Letter," its press release provided a telephone number in Washington for media inquiries. Inner City Press called the number and asked among other things how it would impact review under the Community Reinvestment Act, which involves public notice and comment.

  Inner City Press will not here report the name of the person answering, because it was insisted that no name could be given.

  Rather Inner City Press was directed to the FOIA footnote of the Supervisory Letter, that some records about the pre-approvals will be available, after the fact, under FOIA.

  But while the Fed is pre-approving, the public will have no way to know what records to request. This can be called false transparency.

  Even on BB&T's "Project Palm," it is only now that the Fed releases records half-showing its response to Inner City Press' February 2012 comment on and against the proposal.

  The just-released records show that on February 7, Claudia A. VonPervieux of Fed staff was "working on a draft rejection letter for M.Lee" of Inner City Press when the Fed belatedly realized that the Press was right: public notice had disappeared such that one couldn't know what to comment on.

   And so a brief extension of the comment period was granted, but only for Inner City Press, which did not cure the problem of lack of notice to the public at large. See released e-mails, attached. And so it goes at the Fed. Watch this site.

July 23, 2012

The Fed has done it again: improperly withheld basic information about an application, as admitted even by the pro-bank Governor now in charge of ruling on FOIA appeals. Governor Jay Powell, recently withholding ING - Capital One information, now finds on another application (BB&T) that information was improperly withheld under Exemption 5 and can now be released including records that "describe transaction filings and discuss comment period timings and news articles." The rest -- at least 156 full pages -- he withholds.

Meanwhile one of Governor Powell's ex employers has decided to hold onto its stake in a bank in Taiwan, Ta Chong. How does or will Powell recuse himself? Watch this site.

July 16, 2012

Last week, the Federal Reserve put out a letter offering "pre-filing" review of merger applications to banks. Inner City Press decided to call the number on the Fed's press release with a "media inquiry."

At first they said they'd give an on the record answer. Then they offered only "deep background" not attributable to the Fed -- and even then, only directed ICP to the FOIA part of the letter. This... is what lets scandals like LIBOR and predatory lending happen.

July 9, 2012

Just filed with the Fed:

This is a FOIA appeal to the Federal Reserve Board's "reconsideration" and partial denial, dated June 29, of my FOIA request of February 17 regarding BB&T's proposal to acquire BankAtlantic.

First, I note that I submitted an appeal -- now, rather than acknowledge the improper withholdings appealed from (and have that recorded for example in the FRB's annual FOIA report), the FRB decides to call it a "reconsideration," from which I now submit this second appeal. This record below must be addressed in the response to this (second) appeal.

The Associate Secretary's June 29 letter (the "Denial") outright withholds 53 pages, saying it's clear why. Again, it's not - this is an appeal of all those withholdings.

Why is the October 28, 2011 "update on Project Palm" being withheld? Also, information about the 12/02/2011 call, and the E-Apps notifications of 12/13/2011 and 12/16/2011, and the Thro to Seld e-mail of the latter date. Also the Cox to Smith e-mail of 01/25/2012.

ICP is explicitly challenging all withholdings concerning the extension of the comment period, including but not limited to the 02/06/2012 and 02/07/2012 emails.

July 2, 2012

The Federal Reserve's FOIA response to Inner City Press about the applications of Mitsubishi UFJ Financial Group, Inc., The Bank of Tokyo-Mitsubishi UFJ, Ltd and UnionBanCal Corporation to acquire Pacific Capital Bancorp & Santa Barbara Bank & Trust outright withholds 634 pages, and we have appealed.

But what's provided points to more. For example:

Subject: Unionbancal/Pacific Capital BC transaction - call Wed?
From: Elisa Johnson
To: Kenneth Binning; Cynthia Holbrook; Steven Takizawa Cc: Jose Alonso
Date: 02/21/2012 04:53 PM

Hello everyone -

I just took a call from Mark Gillett of Union Bank wanting to have a preliminary call tomorrow at 11am to discuss the filing requirements for Unionbancal's acquisition of Pacific Capital BC, Santa Barbara. Union is in the midst of conducting their due diligence . This will be an all cash transaction. FYI: the code name for this deal is Pebble Beach. The structure of the deal has "gelled"

But no earlier records are provided. And many records are withheld as "not responsive" -- with "also b(5)" added later in a different font. The Fed continues to abuse FOIA - we have appealed. Watch this site.

June 25, 2012

After Inner City Press / Fair Finance Watch challenged the applications of Mitsubishi UFJ Financial Group to acquire Pacific Capital Bancorp & Santa Barbara Bank & Trust, the applicants decided to withhold basic information about their Community Reinvestment Act programs.

Then Inner City Press filed Freedom of Information Act requests and appeals. Now, Mitsubishi related some information, while blacking out columns and columns, and most of its response on the CRA. Meanwhile, the Fed by letter dated June 18 says it is withholding 634 pages, but is providing other information, which we've yet to receive. We'll have more on this.

June 18, 2012

So the Federal Reserve, belatedly ruling on June 6 on Inner City Press / Fair Finance Watch FOIA request of February 17 regarding BB&T and BankAtlantic, says "156 full pages and portions of other pages (as will be apparent to you from the face of the documents to which redactions have been made) will be withheld from you." We aim to appeal - watch this site.

June 11, 2012

The Federal Reserve has issued a flurry of FOIA denials and extensions of time. Then comes a heavily redacted submission TO the Fed from Sullivan & Cromwell, on Mitsubishi UFJ Financial Group's application to buy Pacific Capital Bancorp and long time RALs rogue Santa Barbara Bank & Trust.

Asked about its due diligence on the RALs rogue, Sullivan & Cromwell say "see Confidential Exhibit 1" -- but do not provide it. Well, we DO want to see it. Watch this site.

June 4, 2012

The Federal Reserve Bank of San Francisco has confirmed receipt of the comments of Inner City Press / Fair Finance Watch. While the letter of Kenneth R. Binning of the FRBSF is dated May 9, it wasn't mailed until May 29. Maybe THIS is one of the reasons the Federal Reserve didn't stop the subprime meltdown...

May 29, 2012

Last week Inner City Press RSVP-ed for and went to cover a speech by the President of the Federal Reserve Bank of New York William Dudley. But from CFR's overflow run to which the media was confined, ICP was not able to ask any questions, whether about bank accounts for UN member states or why it is appropriate for JPMorgan Chase CEO to be on the Federal Reserve Bank of NY board of directors, given that the FRBNY directly regulated JPMC, which has recently gambled and lost $3 billion and counting. This last question, Inner City Press submitted twice by email, but it was not posed. Nor has it been answered since.

Months after the Federal Reserve approved the applications of Capital One and ING DIRECT, now the Fed admits it improperly withheld information in response to Freedom of Information Act requests and appeals by Inner City Press / Fair Finance Watch. A little late, isn't it? We need new regulators. Watch this site.

May 21, 2012

When the Federal Reserve approved on May 9 the applications to acquire 80% of Bank of East Asia, it did NOT require an application from or review the real party in interest: the Chinese government. Inner City Press / Fair Finance Watch raised the issue, this loophole created by the Fed, under which government's like the DPRK or Syria or Bahrain could acquire a bank in the US without any review of the risks created. The Fed merely cites the loophole it opened up itself (that governments are not companies -- an exception intended for US-based governments like states), then says that "Congress has provided other US agencies the authority to review national security issues in proposals by foreign companies to acquire US companies."

The Fed is missing, intentionally, the point: ownership of an insured bank by a foreign government that might even be subject to regime change by the US or its allies is a risk that the Fed must consider. Watch this site.

May 14, 2012

So sleazy Deutsche Bank, AFTER de-certifying with the Fed, now pays out a governmental settlement for predatory loans defrauding FHA. Wouldn't it seem like time for the Fed to reconsider that decertification?

May 7, 2012

As Deutsche Bank Evades Fed, Tarullo Alludes to "Some Private Actors," Blurs FOIA & Volcker Rulemaking

By Matthew Russell Lee

UNITED NATIONS, May 2 -- When the Federal Reserve's Daniel Tarullo spoke Wednesday at the Council on Foreign Relations about regulatory reform, he did not mention a single bank or financial institution.

  Inner City Press asked him about Deutsche Bank, which earlier this year split off its investment banking business so as to avoid Fed regulation. Tarullo on March 22 told the Senate the Fed would have to "respond" to this, that it had some impact on this thinking on regulation.

  Tarullo replied, "Matthew, what I said was it effected my thinking, not change, that implies a dramatic shift." Then he answered, six minutes in all, without once mentioning Deutsche Bank. He said that "the kind of changes some private actors are engaged in will have to effect the scope of our regulations."

  These regulations, he said, will be "under 165... to make sure we can implement Congressional concern."

  Inner City Press also asked Tarullo if he claimed the Fed has gotten more transparent since the financial meltdown, noting the Fed's recent denial in full of access to over 2000 pages responses to an Inner City Press FOIA request.

  Here now is an online copy of the Fed's FOIA denial

  Tarullo, which has previously heard of FOIA problems at the Fed, said he didn't know which FOIA request was referred to, then answered about administrative rule making. He said "for rule making, we get comments" and now distinguish "unique comments -- that is, not form letters."

He said there have been "17,000 Volcker Rule submissions... Absorbing all the comments is a substantial undertaking. If it takes longer to give due respect to comments," so be it.

  The FOIA request referred to was about Capital One's compliance, since the Fed's approval order on Capital One - ING DIRECT, including with Capital One's commitments to open branches and lend $180 billion" and about Capital One firing 490 assistant branch managers despite having made representations about increasing service.

  Amazingly, the Fed found 2200 pages responsive but provided not a single document, instead saying that "your request is denied in full," including as to each and every record "regarding with the Approval Order" of Capital One - ING DIRECT. ICP commented extensively on that application, as did NCRC, and the Fed's order cites the comments and Capital One's responses and representations. Now the Fed denies access to every record about compliance with the representations.

Inner City Press' request included a specific reference to branch closings, for example, which are not confidential. Additionally, information submitted and reviewed about compliance with Capital One's representations would contain HMDA data, which is public and not withholdable.

Even since the April 10 request, ICP on April 22 submitted to the Fed information about an admission by Capital One of fraud on consumers:

"Earnings power of HSBC card deal to drown out near-term noise, says Capital One CEO," April 19, 2012

Fairbank also reported a $75 million accrual for customer refunds stemming from what he described as 'instances in which phone sales people didn't adhere to our scripts and sales policy when cross-selling products to our credit card customers.' He said it is very important that Capital One ensures customers bought the unspecified products in the manner the company intended."

Just because it SOUNDS like the responsive records might include some withholdable information, it is outrageous to withheld each and every responsive record, citing the catch-all Exemption 8. The Fed is increasingly abusing and evading FOIA. Watch this site.

April 30, 2012

The Federal Reserve just continues to hit new lows, leading to this FOIA appeal by ICP:

This is an immediate FOIA appeal to the Federal Reserve Board's denial dated April 26, 2012 of my FOIA request of April 10, 2012 for "all records in the possession of the FRS concerning Capital One's compliance, since the FRB's approval order on Capital One - ING DIRECT, including with Capital One's commitments to open branches and lend $180 billion" and about Capital One firing 490 assistant branch managers despite having made representations about increasing service.

Amazingly, the Fed provides not a single document, instead saying that "your request is denied in full," including as to each and every record "regarding with the Approval Order" of Capital One - ING DIRECT. ICP commented extensively on that application, as did NCRC, and the Fed's order cites the comments and Capital One's responses and representations. Now the Fed denies access to every record about compliance with the representations. This is a new low.

Inner City Press' request included a specific reference to branch closings, for example, which are not confidential. Additionally, information submitted and reviewed about compliance with Capital One's representations would contain HMDA data, which is public and not withholdable.

Even since the April 10 request, ICP on April 22 submitted to the Fed information about an admission by Capital One of fraud on consumers:

"Earnings power of HSBC card deal to drown out near-term noise, says Capital One CEO," April 19, 2012

Fairbank also reported a $75 million accrual for customer refunds stemming from what he described as 'instances in which phone sales people didn't adhere to our scripts and sales policy when cross-selling products to our credit card customers.' He said it is very important that Capital One ensures customers bought the unspecified products in the manner the company intended."

Just because it SOUNDS like the responsive records might include some withholdable information, it is outrageous to withheld each and every responsive record, citing the catch-all Exemption 8. The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.

April 23, 2012

Who knew? The Federal Reserve, which barely enforces the Community Reinvestment Act in the US where it is the law, last week told a group of visitors from Central America that perhaps they could assist in rating banks' performance in countries outside the US. We'll see.

April 16, 2012

MetLife is one of the largest financial institutions in the world, but now it seeks to escape Federal Reserve regulation by selling its deposits to GE Capital Financial. Inner City Press / Fair Finance Watch has now opposed the transaction - watch this site.

April 9, 2012

The Fed has, so far, allowed BB&T to amend its application to acquire BankAtlantic, to tell ICP about its application late, and not yet to extend the comment period. ICP has complained:

This is a third comment on the applications by BB&T to acquire scandal-plagued BankAtlantic. BB&T has significantly amended the proposal after an adverse court ruling -- the changed structure should trigger a new public comment period.

Troublingly, while BB&T outside law firm Wachtell, Lipton send the amendments to the Fed on March 19 by courier, they were only sent to Inner City Press the follow (this) month. So Inner City Pres is requesting an extension of the comment period.

It would be ludicrous to argue that the changes to the proposal, the result of a court order, are not substantial. As such, it is unclear to ICP why no new public notice appears to have been published.

As described, BB&T would assume about $285 million of BankAtlantic Bancorp TruPS obligations in exchange for a 95% preferred interest in a newly established limited liability company, which will comprise about $423 million of loans and $17 million of other net assets. BB&T has estimated $350 million of recoverable preference value in the limited liability company. Once BB&T recovers $285 million in preference amount from the limited liability company, its interest in the company will terminate. BB&T would also have an incremental $35 million guarantee to assure BB&T's recovering within seven years of the $285 million preference amount.

ICP has recently obtained BB&T 2011 HMDA-LAR and will be commenting on its, in a week's time. The comment period must be extended.

April 2, 2012

  In the first study of the just-released 2011 mortgage lending data, Inner City Press and Bronx-based Fair Finance Watch have found that banking behemoths Citigroup, JPMorgan Chase and Wells Fargo continued with high cost loans and disparities by race and ethnicity in denials and higher-cost lending.

2011 is the eighth year in which the data distinguishes which loans are higher cost, over a federally-defined rate spread of 1.5 percent over Treasury bill yields.

The just released data show that Citigroup confined African Americans to higher-cost loans above this rate spread 3.38 times more frequently than whites in 2010, worse that its 2.25 disparity in 2009, Fair Finance Watch has found.

Citigroup confined Latinos to higher-cost loans above the rate spread 2.42 times more frequently than whites in 2010, worse that its 1.72 disparity in 2009, the data show.

“Even after the bailouts, lending disparities grew worse and not better," said Fair Finance Watch. "Regulatory laxity, at least on fair lending, has continued despite the financial meltdown caused by predatory lending."

For JPMorgan Chase, the disparity for African Americans in 2011 was 2.21; for the largest of Wells Fargo's many HMDA data reporters, the disparity for African Americans in 2011 was 2.28.

"The Federal Reserve is becoming more and more bank-friendly, including with the recent nomination of former hedge funder and Deutsche Bank official Jay Powell for a seat on the Federal Reserve Board. It is still not clear if the new Consumer Financial Protection Bureau will get to this problem," Fair Finance Watch continued. "The disparities in the 2011 mortgage data of these banks further militate for aggressively watchdogging and breaking up these banks."

Growing Southern bank BB&T, even absent its subprime unit Lendmark, in 2011 confined African Americans to higher-cost loans above the rate spread 2.59 times more frequently than whites

Fair Finance Watch has continued its enforcement project in the South, most recently raising issues under the Community Reinvestment Act on BB&T's proposal to acquire BankAtlantic. In response, the Federal Reserve Board extended the comment period. Much of BB&T's application has been blacked out or withheld in full, which Inner City Press is challenging under the Freedom of Information Act.

Inner City Press & FFW have also joined others concerned with Deutsche Bank's decertification as a financial services holding company to escape Dodd Frank including its capital adequacy rules -- particularly given Deutsche Bank's role in the subprime scandal, as lender, securitizer and now major forecloser.

The law required that the 2011 data be provided by March 31, following March 1 joint requests by Fair Finance Watch and Inner City Press. Several banks did not provide their data by the deadline, most notably Capital One and Bank of America, despite confirming receipt of the request. Further studies will follow: watch this site.

March 26, 2012

Deutsche Bank was big into subprime, as lender, securitizing and foreclosing trustee. But now that the Dodd-Frank law is coming into effect, Deutsche Bank is restructuring to avoid the law's requirements. Fed Governor Tarullo has said this gives pause. And what will he and the Fed do?

March 19, 2012

So the FRB stiffly and belated went on Twitter and was greeted by... the CFPB, already there.

March 12, 2012

"The Federal Reserve is reportedly stalling some banks' proposals to pay dividends and repurchase shares, after it determined that the firms are miscalculating the potential losses on consumer debt in an event of a financial crisis." A little late, isn't it?

March 5, 2012

On the Volcker Rule, Fed board members and staff members met with JPMorgan Chase 16 times, Bank of America 10 times, Goldman Sachs 9 times, Barclays 9 times & Morgan Stanley 9 times -- what about Citigroup?

Even as requests for reconsideration of Capital One - ING DIRECT pend at the Federal Reserve, in Europe, the terms of ING’s bailout by the Dutch government are being questioned by a European Union court in the first case challenging EU conditions on more than $1.3 trillion of bank rescues throughout the region. ING was ordered by the European Commission to sell units to shrink its balance sheet by 45 percent by the end of 2013 and avoid undercutting rivals on prices for some banking products for three years or until it repaid the aid. The EU must approve large state subsidies and can impose conditions on the aid. There have beeen challenges by ING and the Dutch government to the terms of the EU’s approval, which the bank says punished it too harshly for state help in 2008 and 2009. ING said the regulator miscalculated the amount of aid and imposed excessive restructuring demands. We'll see.

February 27, 2012

ICP has now requested reconsideration, following the Federal Reserve Board's February 14 approval of the proposed acquisition by Capital One Financial Corporation (“Capital One”) to acquire ING Bank, FSB and its affiliates (“ING”), to form what would be the fifth largest bank in the country.

One of the FRB's sleights of hand is in footnote 27, where after reciting ICP's objections the FRB says "the Board has determined in a separate action that ING Groep would not control Capital One as a result of this proposal. See Board letter to Mark Menting, Esq. (February 14, 2012)."

So a major contested issue was confined to a side letter on the same day at the approval. Amazingly, the Board has yet to provide even a copy of this letter to ICP, which commented extensively on this part of the proposal, including on ING being under investigation for violating sanctions.

While the Order says the charges are against ING, not ING Direct, in the side letter the Board was addressing ING owning a substantial percentage of Capital One. This segmentation is the type of legal legeredemain by which the FRB allowed the financial meltdown. This Order should be reconsidered, including in light of Capital One's dramatic drop in mortgage lending and did not adequately explain its findings - for example, the FRB asserts that Capital One’s credit card small business lending is minimal in contrast to findings by NCRC and others.

Footnote 10 of the FRB's approval order says

"One commenter expressed concern about ex parte communications and the opportunity for the public to rebut all information that was provided by Capital One. On review, the Board found that the public had a full opportunity to provide the Board with any information related to the factors that the Board must consider in acting on the notice. The information submitted by Capital One, and the release of that information to the public, was in accordance with the Board’s regulations and policies. The Board confirmed that all contacts between Capital One and staff were in accordance with the Board’s rules on ex parte communications."

The FRB should void and reconsider its Order, inter alia following its now appealed under the Freedom of Information Act denial of February 7, 2011 -- emailed to ICP after 5 pm on Feb 7 -- of ICP's FOIA request of October 29, 2011. This document dump was and is beneath the Federal Reserve.

Among the 1040 pages provided (more than 200 have been withheld in full), some show an irregular process tainted by ex parte communications and a disturbingly pervasive resolving door. Some examples, from a single one of the files dumped on ICP on February 7:

Former Federal Reserve legal staffer Andy Navarrete, now Senior Vice President of Capital One, improperly reached out to Scott Alvarez on August 25, 2011;

On November 7, 2011, PARobinson [a] wlrk.com – Patricia A. Robinson, presumably the always cordial Pat Robinson who was in the Federal Reserve Board’s Legal Division working on applications -- wrote to michael.sexton [a] frb.gov and stanlyn.clark [a] frb.gov

"It was great talking to you last week, Mike. Stanlyn, I am sorry that I missed you but hope to catch up very soon (now that my one-year 'cooling off' period has expired).

With all due respect to Ms. Robinson, it is troubling that Capital One could hire and use an attorney who personally knows and worked with all of the Fed attorneys reviewing the application. This led to a November 21, 2011, call about, among other things, the HSBC credit card portfolio, with 3 OCC officials on the call -- tainting that process as well. On November 18, 2011, Ms. Robinson was at the OCC, 8:45 to 10:45 AM. There was another call on December 9, 2011.

As noted in ICP's Feb 7 FOIA appeal, as simply one example, the Fed held ex parte communications with Capital One on November 21, writing a memo ostensibly as a tip of the hat to the rules against ex parte communications. Then the Fed withhold the summary under Exemption 4.

The Fed has even made withholdings from its own August 29, 2011 questions to Capital One. This is an outrage and has been appealed from.

The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in connection with this request for reconsideration.

February 20, 2012

Fed Approves Capital One - ING After Delay & Data Dump, Reconsideration?

By Matthew R. Lee

SOUTH BRONX, February 14, updated -- Some Valentine: the day after the Federal Reserve for the second time postponed decision on the Capital One - ING bank merger, a Fed legal staffer called Inner City Press at 5:15 pm on Valentine's Day to say the deal was approved, but not in the normal way.

Inner City Press asked for an explanation of the February 8 postponement, and the February 13 deferral of decision, but none was provided. Reconsideration will be requested.

  One of the Fed's sleights of hand is in footnote 27, where after reciting Inner City Press' objections the Fed says "the Board has determined in a separate action that ING Groep would not control Capital One as a result of this proposal. See Board letter to Mark Menting, Esq. (February 14, 2012)."

  So a major contest issue was confined to a side letter on the same day at the approval. Footnote 10 of the Fed's approval order says

"One commenter expressed concern about ex parte communications and the opportunity for the public to rebut all information that was provided by Capital One. On review, the Board found that the public had a full opportunity to provide the Board with any information related to the factors that the Board must consider in acting on the notice. The information submitted by Capital One, and the release of that information to the public, was in accordance with the Board’s regulations and policies. The Board confirmed that all contacts between Capital One and staff were in accordance with the Board’s rules on ex parte communications."

   Consider: on the night of February 7, the Fed issued a document dump of some 1040 pages responding to a Freedom of Information Act request Inner City Press filed in October.

   Among the 1040 pages provided (more than 200 have been withheld in full, from ICP and other commenters, NCRC and others), some show an irregular process tainted by ex parte communications and a disturbingly pervasive resolving door. Some examples, from a single one of the files dumped on ICP on February 7, and which ICP commented on to the Fed in the run-up to its February 13 meeting:

Former Federal Reserve legal staffer Andy Navarrete, now Senior Vice President of Capital One, improperly reached out to Scott Alvarez on August 25, 2011;

On November 7, 2011, Patricia A. Robinson at Capital One's law firm – presumably the same Pat Robinson who was in the Federal Reserve Board’s Legal Division working on applications -- wrote to Michael Sexton and Stanlyn Clark at the Federal Reserve:

"It was great talking to you last week, Mike. Stanlyn, I am sorry that I missed you but hope to catch up very soon (now that my one-year 'cooling off' period has expired).

As ICP commented, it is troubling that Capital One could hire and use an attorney who personally knows and worked with all of the Fed attorneys reviewing the application. This led to a November 21, 2011, call about, among other things, the HSBC credit card portfolio, with 3 OCC officials on the call -- tainting that process as well. On November 18, 2011, Ms. Robinson was at the OCC, 8:45 to 10:45 AM. There was another call on December 9, 2011.

The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to ICP's pending appeal.

For the reasons of record, and as argued by NCRC, the Federal Reserve should reconsider the ING approval...

February 13, 2012

Why did the Federal Reserve postpone its meeting on Capital One - ING from Wednesday afternoon for five days until Monday, February 13? Capital One's spokeswoman said “The board has informed us that the planned meeting for this afternoon has been rescheduled for Monday, February 13th. We understand that the delay is due to a scheduling conflict, and we look forward to their decision early next week."

But there's a problem with this spin, that scheduling made it impossible. At 3:05 pm on Wednesday, Inner City Press got a voice mail from the Federal Reserve's Legal Division, Michael Waldron, about an application that ICP Fair Finance Watch had commented on some time ago: Hawa - Korea Exchange Bank. The Board had just approved the application, Waldron said (without also stating any right to request reconsideration.)

In that Order Inner City Press / Fair Finance Watch is, yes, "the commenter."

So if the Fed could approve applications on Wednesday afternoon but chose not to do so for Capital One, why not?

One can hope that the outrageous "document dump" of hundreds of pages on the eve of the Fed's scheduled February 8 meeting, which Inner City Press immediately raised to the highest levels of the Fed, combined with calls Wednesday from NCRC members to open the meeting, caught the Fed's attention.

Then this should, too: Inner City Press, reviewing the documents dumped, has now commented to the Fed that

Among the 1040 pages provided (more than 200 have been withheld in full), some show an irregular process tainted by ex parte communications and a disturbingly pervasive resolving door. Some examples, from a single one of the files dumped on ICP on February 7:

Former Federal Reserve legal staffer Andy Navarrete, now Senior Vice President of Capital One, improperly reached out to Scott Alvarez on August 25, 2011;

On November 7, 2011, PARobinson [a] wlrk.com – Patricia A. Robinson, presumably the always cordial Pat Robinson who was in the Federal Reserve Board’s Legal Division working on applications -- wrote to michael.sexton [a] frb.gov and stanlyn.clark [a] frb.gov

"It was great talking to you last week, Mike. Stanlyn, I am sorry that I missed you but hope to catch up very soon (now that my one-year 'cooling off' period has expired).

With all due respect to Ms. Robinson, it is troubling that Capital One could hire and use an attorney who personally knows and worked with all of the Fed attorneys reviewing the application. This led to a November 21, 2011, call about, among other things, the HSBC credit card portfolio, with 3 OCC officials on the call -- tainting that process as well. On November 18, 2011, Ms. Robinson was at the OCC, 8:45 to 10:45 AM. There was another call on December 9, 2011...

The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.

This information must be reviewed, and released and comment allowed thereon, by ICP, NCRC and others, before the Fed considers approving the Capital One - ING proposals.


February 6, 2012

The fight on Capital One - ING continues, as more and more information is withheld. Inner City Press filed this FOIA appeal on February 4:

This is a timely FOIA appeal to the Federal Reserve Board's denial of February 3, 2012 of my FOIA request of January 6, 2012, for all of Capital One's January 3, 2012 submission to the Fed, etc..

The Fed has provide a document with redactions which ICP is hereby appealing. From Capital One's response to the Fed's December 15, 2011 questions, the Fed has blacked out the entirety of Footnote 1, which seemingly explains Capital One's lending in California.

The Fed has blacked out on the top of Page 6 some Capital One argument about how and why it will improve the fairness of its lending.

On Pages 11 and 12, Capital One makes representations to the Fed about with whom it will partner, representations clearly meant to argue for approval of Capital One's applications - but Capital One, and now the Fed, withheld the names and the argument. ICP is appealing.

The bottom of Page 16 is entirely redacted; there is no way to know what type of information it contains, and ICP appeals from the invocation of Exemption 8 (bank supervision) and Exemption 4, including the many redactions from the Exhibits to Capital One's submission.

The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.

This information must be reviewed, and released and comment allowed there, before the Fed considers approving the Capital One - ING proposals, protested by NCRC, ICP and others

January 30, 2012

Fifty days after Inner City Press filed a Freedom of Information Act request for Capital One's withholdings from its November 15, 2011 submission to the Federal Reserve, the Fed responded to ICP: withholding 590 pages in full, and providing to ICP and other commenters a mostly redacted 34 page document.

ICP has nearly immediately appealed, and commented to the Fed:

This is a sixteenth comment from Inner City Press / Fair Finance Watch ("ICP") opposing the proposed acquisition by Capital One Financial Corporation (“Capital One”) to acquire ING Bank, FSB and its affiliates (“ING”), to form what would be the fifth largest bank in the country.

The Federal Reserve should re-open its comment period, inter alia following its now appealed under the Freedom of Information Act denial of January 24, 2012 of ICP's FOIA request of December 4, 2011, for "all withheld portions of Capital One's November 15, 2011 submission to the Fed on the pending ING DIRECT application."

It took 50 days for the Fed to respond. Worse, 590 pages are being withheld in full, and of the single 35 page document subsequently sent to Inner City Press -- this appeal is timely -- much has been redacted, including how Capital One would pay for the acquisition,

weaknesses in ING DIRECT (page 3);

all information about Capital One's credit card lending to people with FICO scores below 660, and subprime card lending (page 4);

small business lending (page 5);

due diligence on HSBC's card platform, previously of the predatory lender Household (page 13);

forward sale agreements (page 14 - even the Fed's question is withheld, we appeal that);

mortgage lending (page 16); swaps (page17);

and the entirety of pages 19 through 34, including the Fed's questions. This is outrageous.

The Fed cites Exemption 5, but it how an "intra-agency" exemption could be cited for what Capital One submitted is unclear. ICP opposes the invocation, too, of exemption 8 without explaining in detail the type of information in the 590 pages withheld in full. It is hard or impossible to argue about this black hole of information: the Governor charged with ruling on this appeal should review all of the information in camera, and release all portions that are not strictly exempt.

The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.

This information must be reviewed, and released and comment allowed there, before the Fed considers approving the Capital One - ING proposals.

For the reasons of record, and as argued by NCRC, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC, and the related stealth ING proposals.

January 23, 2012

When in September the Federal Reserve held a public meeting on Capital One - ING in Chicago, Fed legal division official Ms. Thro replied, on camera, to Inner City Press / Fair Finance Watch's comments by saying ICP should submit a Freedom of Information Act request. ICP immediately did.

Among other things, ING is reportedly under investigation for violating sanctions, on Sudan, Iran and other elsewhere - topics which deserve a public airing before ING is considered to be allowed to own 9.9% of what would become the fifth largest US financial institution.

Inner City Press returned a telephone call to another Fed Legal Division staffer and voluntarily narrowed its FOIA request, for specific adverse ING information such as the above. The Fed identified responsive information but forwarded the request to the OCC, they say on December 20.

Now, more than three months later, the information is withheld in full by OCC denial on Friday. The OCC's denial does not provide a speck of information, does not give any idea of what is being withheld, and does not even state how many pages are being withheld.

There is no way to assess the propriety of these withholdings in full, ostensibly under Exemption 4. ICP has immediately appealed the withholding(s).

This information about ING must be reviewed, and released and comment allowed there, before the Fed considers approving the Capital One - ING proposals.

For the reasons of record, and as argued by NCRC, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC, and the related stealth ING proposals.

January 16, 2012

  Responding to the Federal Reserve to allegations that Capital One violates bankruptcy laws, COF's law firm Wachtell, Lipton, Rosen & Katz in a January 11 submission wroted that it "was unaware of the debtor's bankruptcy because [REDACTION, Pages 3 - 4]." Inner City Press on January 14 challenged this redaction under the Freedom of Information Act, sating that as before and on the still pending requests, all information not clearly entitled to confidential treatment under the narrowest reading of the exemptions should be provided before any decision to approve, even conditionally, COF's applications to acquire ING DIRECT, protected by ICP, NCRC and others.

* * *

  It is argued that Obama "had" to nominate a Deutsche Bank and Carlyle Group hedge fund insider, Jay Powell, to the Federal Reserve as a condition of getting a Democrat also confirmed.

  Meanwhile Democratic representatives are urging Obama to offer a recess appointment for a new head of the Federal Housing Finance Agency. Twenty eight congressmembers from California signed a January 10 letter, which argued that Obama should use the same legal justification for appointing a new director at the agency that he applied to Cordray and the CFPB.

"As the fiduciary of government-backed entities, there are steps that the FHFA can take to help prevent foreclosures while also protecting taxpayers," they wrote. "Installing a permanent Director of the FHFA will allow the FHFA to move forward to make key decisions that will help keep families in their homes and improve our economy."

  Some wonder why this logic isn't applied to the Federal Reserve Board, where Obama supporters argue that he "had" to nominate a hedge fund insider Jay Powell in order to get any confirmation.

  The Fed is reportedly preparing to rubber stamp Capital One's application to acquire ING DIRECT, protested by NCRC, Fair Finance Watch and others, even as Capital One's lawyers try to withhold the most substantial portions of their responses to the Fed, including on Capital One's related application to the Office of the Comptroller of the Currency to buy from HSBC the subprime credit card platform of the former Household International, charged with nationside predatory lending. Why?

January 9, 2012

In remarks following a speech in Chicago, St. Louis Federal Reserve Bank President James Bullard called it unlikely that the central bank will need to buy more bonds to stimulate the economy, in view of recent data on holiday sales and labor market conditions. Bullard also repeated support for an explicit inflation target, which is expected to be a subject of the Fed's meeting later this month.

Capital One put in another submission to the Federal Reserve on its ING DIRECT application -- but then withheld large parts of it as sent to Inner City Press and other commenters. ICP has challenged under the Freedom of Information Act, and submitted the below to the Fed:

The Federal Reserve should re-open its comment period, inter alia following improper withholdings, now challenged under the Freedom of Information Act, from Capital One's (COF's) submissions to the Federal Reserve System dated January 3, 2012, with those improperly redacted by COF's law firm Wachtell, Lipton, Rosen & Katz.

All redacted information should be reviewed and provided before any decision to approve, even conditionally, COF's applications to acquire ING DIRECT. We refer most pressingly to the redacted response to the FRS' December 16 questions, sent to us by email on January 6 by WLRK under cover lever dated January 3, 2012.

COF is required to send us their submission under the FRS' ex parte rules, but has sent us significantly redacted versions.

Under the headings “Mortgage Lending," "Community Development Lending," "Other Lending" and the like, COF makes claims about policies and loans made and then redacts line after line. This also takes place when COF is asked in 1d about its lending geographically: contrary to the spirit and letter of CRA, geographical identifiers are redacted, even footnotes. We challenge each and every one of these absurd redactions, as well as the withholding of purported confidential exhibits 1, 2 and 3.

This should be treated as a FOIA appeal but was submitted through the FRS' FOIA form on January 6 to gain expedited treatment. All information not clearly entitled to confidential treatment under the narrowest reading of the exemptions should be provided before any decision to approve, even conditionally, COF's applications to acquire ING DIRECT.

Even as redacted, the submission make clear that Capital One's ING proposal is related to its proposal to buy the HSBC (ex-Household) credit card platform. HSBC put out a press release bragging about accounts renewed that would to go to Capital One: even regarding this, there are issues. For inclusion in the record: http://big-lots.pissedconsumer.com/lied-to-by-racist-big-lots-worker-20080308114996.html

For the reasons of record, and as argued by NCRC, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC, and the related stealth ING proposals.

December 26, 2011

Bank of America & Federal Reserve Let Off Hook by DOJ Settlement, As BofA Bluewashed by UN

By Matthew R. Lee

SOUTH BRONX, December 22 -- The $335 million "Countrywide" fair lending settlement, as announced by the Department of Justice on December 21, went out of its way to let off the hook Bank of America and its regulator the Federal Reserve Board.

  The paper of record, without further comment, reported that the settlement was based on a referral by the Federal Reserve, covering a period before Bank of America owned Countrywide.

  But more than three years ago, over the detailed objections of Bronx-based Fair Finance Watch and others, the Federal Reserve allowed Bank of America to buy Countrywide and continue to run its predatory programs, which were slowed only by the subprime financial meltdown.

  Fair Finance Watch found, and Inner City Press reported, that "in 2006, at Countrywide and its higher-cost Full Spectrum, upper income African Americans were confined to higher cost loans over the rate spread 1.92 times more frequently than whites. In 2006, 24.70% of Countrywide's total mortgages were subprime.

  "In 2007, Countrywide Financial, which Bank of America had applied to buy, confined African Americans to higher-cost loans 1.95 times more frequently than whites, and denied the applications of Latinos 1.53 times more frequently than whites."

  The Federal Reserve approved Bank of America's acquisition of Countrywide without any conditions, despite this testimony. The disparities continues at Bank of America after the acquisition, without any action by the Fed.

  Years later comes a settlement that is, in context, a pittance, a smoke screen for a company which has received far more in government bailouts. For shame.

Footnote: Bank of America is also engaged in "blue washing," getting its chairman Charles Holliday named the co-chair of UN Secretary General Ban Ki-moon's High Level Panel on Sustainable Energy for All, despite B of A being protested as the number one funder of mountain top removeal coal mining. Now that B of A has settled charges of racial discrimination, will the UN take note?

* * *

As the Federal Reserve (and OCC, which will be a separate story) try to shield the Capital One - ING - HSBC deals, Inner City Press / Fair Finance Watch has submitted to the Fed a FOIA appeal of the Fed's FOIA denial the the FOIA request of September 28, which stated:

This is a request under FOIA for the entirety of ING's request for a non-control determination to own up to 9.9% of Capital One, and all records reflecting any FRS communications regarding the request or ING from January 1, 2011 to the date of your final response to this request.


Background: at yesterday's public meeting in Chicago on Capital One - ING DIRECT, Ms. Thro of the Legal Division commented on Inner City Press' testimony, that ICP "can file a FOIA request" for ING's request. This is that request, and for communications, and response should be expedited before October 12, or Capital One - ING DIRECT comment period should be extended. Thank you.

Despite Ms. Thro's public comment about the ability to file a FOIA request and implication what one would thereby receive the requested documents, on a timely basis, it took two and a half months for the Fed to respond. This constructive denial should be explained and acted on in response to this appeal.

Worse, among the documents subsequently sent to Inner City Press nearly everything is redacted.

Of the August 15 submission by Sullivan & Cromwel (S&C), the letter requesting confidential treatment is provide: but the entirety of the referenced "Annex A" is withheld.

The denial letter claimed that "the nature and amount of information being withheld will be evident from the face of the documents being provided." This is not true, and should be reversed, explained and acted on in connection with this appeal.

From the September 29 S&C cover letter, the area under Mark Menting's signature is blacked out, with the notation "N/R." Since ICP requested "all" documents, it is absurd to call this portion of the submission, whatever it is, "non responsive." If it is the people who the letter is cc-ed to, the Fed has hit a new low that must be reversed, explained and acted on in connection with this appeal.

Also, the entirely of the September 29 Annex A, including its footnote, is redacted.

Getting even worse, of the November 18 submissions, even a portion of the request for confidential treatment is redacted, as well as the entire annex.

Of the November 23 submission, two and a half paragraphs of S&C's letter to Ms. Thro are redacted - each and every redaction is hereby being appealed, including again the absurd blacking out of the area under Mr. Menting's signature.

From the November 29 submission, the blacked out "N/R" is on a separate page. It is absurd to claim, in response to the request -- invited by Ms. Thro -- for information related to the any non-control determination that this material, which S&C's letter says is related to the requested non-control determination, is "not responsive." The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal.

Here is another just filed FOIA appeal:

This is a timely FOIA appeal to the Federal Reserve Board's partial denial of my FOIA request and letter of October 23, 2011 related to the proposed acquisition of US-based Bank of East Asia by the China Investment Corporation, and Central Huijin Investment Limited and Industrial and Commercial Bank of China (ICBC), owned by the Chinese government.

The Fed's response, regular mailed on December 9 -- this appeal is timely -- decides to limit ICP's FOIA request to only the portion related to the Community Reinvestment Act, because Inner City Press mentioned the CRA. And so the White & Case submission of October 17, which ICP was supposed to get under the Fed's rules against ex parte communication, has the responses to items 4, 5 and 6 withheld as "not responsive."

This makes a mockery both of FOIA and of the Fed's rules against ex parte communication. On October 23, Inner City Press submitted including to the Office of the Secretary of the FRB a letter stating in part that

"I filed a timely challenge to the applications involving Industrial and Commercial Bank of China (and its ultimate parent the Chinese government -- since the PRC government is the ultimate controlling shareholder, this letter timely questions why the PRC government is not an applicant here) to acquire 80% of Bank of East Asia. The FRB on October 6 asked ICBC three questions, including one CRA and consumer compliance, and told ICBC to send us a copy, under the rules against ex parte communications... We note that the signatory counsel for the Industrial and Commercial Bank of Bank is the former general counsel of the Federal Reserve Bank of New York, and believe that in this context it is particularly important that the information be provided and a public hearing held. Please send all of the improperly withheld information"

Because ICP gave the example of the withheld CRA response, the Fed decided to ignore ICP's right to the rest of the submission, despite the statement about "all of the improperly withheld information" -- that is, any part of the information ICP should have gotten under the rules against ex parte communication, minus that part explicitly exempt under FOIA.

The Fed is now trying to use "non-responsive" as a way about FOIA, to withhold without even citing a FOIA exemption. It is an outrage, and on appeal ALL of the applicants' October 17 submission should be released.

December 19, 2011

The Fed governors on December 16 approved an application with the boilerplate statement that they are concerned when there are disparities in HMDA data. Well, in the Miami Metropolitan Area, Eurobank in 2009 made NONE of its conventional home purchase and home improvement mortgage loans to African Americans. And the Fed has whitewashed and given its blessing to this exclusion...

December 12, 2011

What a scam: a challenged bank, required to send a copy of its submission to the Federal Reserve to Inner City Press / Fair Finance Watch, told the Fed on November that it was forwarding a copy of its response to ICP. But despite a November 14 cover letter, it wasn't actually put in the mail to ICP until December 5. What will the Fed do? Watch this site...

December 5, 2011

Amid the Federal Reserve's delay of FOIA requests, and abuse of FOIA, Capital One was required to send a copy of its November 15, 2011 submission to the Federal Reserve to ICP. But under the heading "Community Reinvestment Act," Capital One says "for additional responsive information, please see Capital One's... Confidential Responses enclosure." ICP has now submitted a request challenging the withholding of CRA responses, as well as Capital One's submissions on the key question of how much of its and HSBC's business is subprime, and the connection between ING DIRECT's loans and depositors. Watch this site.

November 28, 2011

The fraudulence of the Fed's appointment of "community" representatives to its Reserve Bank board has been made clear in New York. On a recent WNYC radio debate about Occupy Wall Street, defense of banks was left up to one Kathryn Wilde of the David Rockefeller-founded NYC Partnership. Once she fell under attack, host Brian Lehrer added to her c.v., saying she is on the board of the Federal Reserve Bank of New York. Why?

November 21, 2011

...Not only about community groups and supporters of Ron Paul or Bernie Sanders, but also on personal experience, down at Occupy Wall Street, there is a lot of criticism of the Federal Reserve and its accountability, some of it fair and some unfair. The best way to distinguish the two is by being transparent.

But when we submit FOIA requests to the Fed, the responses are often delayed, often heavily redacted, and sometimes don't come at all.

Without mentioning any particular pending applications -- I've been told we can't, even though FOIA responses show that the Fed meets with applicants, and outside counsel who used to work in the Federal Reserve System, all the time -- be aware that most community groups make FOIA requests in connection with application they want to comment on.

So to receive responsive documents after the comment period is closed, or even after the application is decided, I mean, approved, is an abuse of FOIA.

While the Federal Reserve Banks often provide the portions of application for which the applicant has not requested confidential treatment, the Fed seems to have no way or commitment to review the propriety of applicants' requests for confidential treatment. There are no repercussions for making over-broad requests for confidential treatment, and so many applicants do, even for submissions that are explicitly label "CRA" submissions.

I'd suggest that comment period not be allowed to close until at least the portions of an application which are not entitled to confidential treatment under FOIA have been provided to the public.

Then there is the matter of what the Fed withholds. The Fed overuses exemption 8 as a blanket - anything to do with regulation - and makes its own processing opaque by overusing exemption 5. Tellingly, the Fed has taken to redacting things that are not exempt from FOIA from the pages it gives out, if the material was "not responsive to the request."

This brings me to the new low the Fed has hit: denying or "rejecting" requests allegedly because the Fed doesn't know what's being requested. I asked for Fed communications by a particular Reserve Bank president -- I won't say who, but he's nominated for the FDIC -- and the response was that searching for his common first name, even with less common last name, would be to burdensome. So NO record were provided.

Each of these things can be fixed, if you and the Governors provide a minimum of oversight. And the Fed, as well as the public, would benefit.

November 14, 2011

The Federal Reserve should re-open its comment period, as while Capital One would presumptively become a global systemically important bank under Basel III, subject to loss absorbency requirements ranging from 1% to 3.5% of risk-weighted assets, Capital One is publicly said it is assuming this will NOT be the case, and has premised its application to the FRB on this dubious assumption.

Also, according to its Form 10-Q filed November 7, Capital One Financial Corp. increased its mortgage repurchase reserves for uninsured securitizations. For the reasons of record, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC.

Meanwhile the FRB is again and again extending its time to respond to FOIA requests related to these applications. The comment period must be extended.

November 7, 2011

Capital One's October 28 submission to the Federal Reserve -- sent to ICP by regular mail on October 31 -- states at the top of page 9 that subprime lending is good -- in direct contrast with Capital One's (first) response which said that NCRC urging it to do FHA lending down to 580 FICO scores "would qualify as subprime lending" and "put taxpayers dollars at risk" -- which is it? Maybe buying the ex-Household predatory lending platform from HSBC has change Capital One's position on subprime.

October 31, 2011

And so most recently the Federal Reserve "rejected" a Freedom of Information request about Capital One - ING DIRECT based on fees. Why not just start processing the request -- the Fed often extends its time anyway -- and ASK the requester about fees? Unless of course the fee issue is just a pretext not to give information...


October 24, 2011

In the continuing saga of Industrial and Commercial Bank of China (and its ultimate parent the Chinese government) to acquire 80% of Bank of East Asia, the Federal Reserve on October 6 asked ICBC three questions, including one on CRA and consumer compliance. But ICBC's counsel's letter dated October 17 say as to CRA, "please see the confidential response separately provided." It is outrageous to withhold the entirety of a response about CRA, totally out of keeping with what other banks do. The information should be released and be allowed to be commented on. Watch this site.

October 17, 2011

The Fed closed its comment period on Capital One - ING DIRECT with more than 300 comments in opposition in the record, and while evading and outright ignoring and refusing to respond to FOIA requests. We'll have more on this.

October 10, 2011

The Federal Reserve continues to hit new lows, now refusing to process Freedom of Information Act requests even as, on camera at their public meeting in Chicago about Capital One - ING DIRECT, Fed official Thro said Inner City Press can submit a new FOIA request. Now dated October 6 comes to letter refusing to process a request, the first time the Fed has done this. And what a time to do this it is. Watch this site.

October 3, 2011--

  At the second of the Federal Reserve Board's three public meetings on Capital One's application to acquire ING DIRECT, the Federal Reserve's Allison Thro decided to "comment" on the testimony, telling Inner City Press to submit a new Freedom of Information Act request for ING's "request for a non-control determination" for its proposal to own 9.8% of Capital One. Inner City Press has said ING should apply, to allow comment on issues like ING being under investigation for violating sanctions and doing business in Sudan and Syria. Now the Fed says to request a copy of ING's "request for a non-control determination" -- on which no public comment is accepted. And the Fed has delayed responding ICP's pending FOIA requests.
 
  Nevertheless, ICP the next day submitted a new FOIA request, which has yet to even be acknowledged by the Fed. Watch this site.

September 26, 2011

As of September 25, it appears that the Fed has yet to put online the transcript of the public meeting on Capital One - ING Direct held 5 days previous, much slower than the UN, IMF and other agencies work.

September 19, 2011

After Gov. Tarullo's unprecedented speech, Inner City Press / Fair Finance Watch put in an eighth comment to the Federal Reserve on Capital One, including

"ICP has received an FRB letter of September 12, responding to ICP's August 19 FOIA request by saying "there may be delays." The comment period should, in that case, be extended. In this context it is unreasonable to expect new FOIA requests, for example for the withheld portions of the September 9 response Capital One was supposed to send. The improperly withheld portions from be provided forthwith."

September 12, 2011

So the Fed asked Capital One to respond to some questions by September 9 and send a copy to commenters. So where is the response? Watch this site.

September 5, 2011

After the Federal Reserve's belated announcement of three public meetings on Capital One - ING Direct, Inner City Press has commented as follows to the Fed:

It is reported that "[a]lthough Federal Reserve Board officials promised to unveil a long-awaited package of key Dodd-Frank rules by the end of the summer, the central bank is likely to need more time to complete them. The rules, which implement Section 165 of the regulatory reform law, cover some of the biggest issues in financial services, including risk-based capital requirements, leverage, resolution planning and concentration limits."

Given the issues raised, including by Federal Reserve official Thomas Hoenig and NCRC and others, about this proposal, it is imperative that the Fed either finalize these regulations before the public meetings, or further extend the comment period...

As noted, on August 11, the day after Capital One announced a related proposal to acquire HSBC's largely subprime credit card business (much of which HSBC acquired along with the scandal tainted Household International), ICP asked that the comment periods should be extended specifically to allow comment on the proposals together, to avoid a segmented and illegitimately limited review.

ICP has yet to receive documents or even a confirmation of receipt of its FOIA Appeal of the improperly withheld records concerning Capital One, ING and the FRS. It is also still not clear what the FRS has done in response to ING's request for a ruling -- without any public comment -- that it would not control Capital One while owning up to 9.9% of the company.


August 29, 2011

  On August 25, three days after the Fed allowed the comment period to close on the application, the Fed admitted in writing to improperly withholding under the Freedom of Information Act some of Capital One's many communications with the Fed, writing to Inner City Press that

"subsequent to the Secretary's response of August 3, 2011, Board staff was informed that an employee at the Federal Reserve Bank of Richmond located additional responsive material. The employee had been traveling between the date of your request on July 22, 2011 and the date of the Secretary's response on August 3, 2011. Accordingly, Board staff was not aware that these additional responsive material existed until after the Secretary had responded to your request on August 3, 2011."

   With Fed chairman Ben Bernanke out in Jackson Hole, Wyoming, long time Fed official Tom Hoenig became on his way out a whistleblower, saying on camera that he has

"serious doubts about Capital One's proposed purchase of ING Direct. 'I have very grave concerns about allowing these amalgamations of institutions that by their very structure are too big to fail, too interconnected to fail and I think the burden should be very heavily against that,' Hoenig said."

  We nominate Hoenig as an honest Fed officials, at least on this... Watch this site.

August 22, 2011

The Fed has withhold copious amounts of information from Capital One and ING, including the Fed's response to a stealth request by ING to have even have to apply to come to own up to 9.8% of Capital One. Inner City Press has submitted FOIA requests and appeals, asking for a ruling before the Fed's (initial?) comment period expires on August 22. But the information, and a ruling, have not be received. Arrogance or incompetence?

August 15, 2011

  ...Currently, the Federal Reserve says that the public has only until August 22 to comment on Capital One, and only on the ING Direct proposal. This is akin to segmenting a destructive project into separate pieces so the overall impact is never acknowledged or reviewed.

  In initial comments to the Fed, prior to today's HSBC announcement, less has been said about ING, in part because ING's US business had been directed at a more affluent clientele, and because ING was not viewed as the applicant.

  But after Inner City Press filed a Freedom of Information Act request with the Federal Reserve Board on July 22, a partial response from the Federal Reserve shows that ING has quietly sought a ruling from Fed General Counsel Scott Alvarez that ING should not have submit any application subject to public comment to own up to 9.9% of Capital One. Click here to view the Fed's (first) FOIA partial denial letter, from which Inner City Press has already appealed.

  This would exclude public comment and consideration of ING doing business with the likes of Sudan, Iran, Cuba, Syria and others on the US state sponsors of terrorism list. ING had admitted being under investigation for, and negotiating with the US Department of Justice about, such violations, and there have been expressions of Congressional concern, which the Fed could ignore by granting ING's stealth request.

  The documents obtained under FOIA show that ING, represented by the Wall Street law firm of Sullivan & Cromwell, on July 15 wrote to the Fed's Alvarez asking for "written confirmation that [ING] will not be deemed to directly or indirectly 'control' Capital One for purposes of the Bank Holding Company Act upon the consummation of the Bank Sale."

Earlier in ING's 13 page request, on which the Fed has until now not solicited or accepted any public comment, ING says that the shares with which Capital One would pay it for ING Direct would "represent between 9.7% and 9.9% of the outstanding shares of Capital One's Common Stock on the closing date." Click here to view some of the released records, including Sullivan & Cromwell's letter to the Fed for ING.

Under the Bank Holding Company Act, any holding over 4.9% can be considered control. One would think, given the issues raised, that the Fed would solicit comment and hold the requested public hearings on ING's request to own nearly 10% of Capital One. But it has only come about because of the Fed's partial FOIA response.

Inner City Press / Fair Finance Watch immediately submitted a comment to the Fed and its chairman Ben Bernanke formally demanding the ING submit an application, and joining in requests by NCRC and others for public meetings and an extension of the comment periods until at least October 22.

In a FOIA appeal already filed with but not yet even acknowledged by the Fed, Inner City Press has demanded all withheld records about ING's stealth request, as well as the withhold portions of Capital One's application, which range from exhibits about money laundering to ING's mortgage portfolio.

Amazingly, the Fed mis-read Inner City Press' FOIA request as only asking from Fed communications with ING and Capital One about the proposed acquisitions, when in fact Inner City Press requested all records reflecting Fed communications concerning either of the two companies.

The Fed has provided such records, including internal Fed emails about the Industrial & Commercial Bank of China and Governor Warsh's meeting with its chairman, in previous responses to Inner City Press.

  The Fed has also withheld records about an "ex parte" meeting as far back at May 26 between Capital One's Kevin Murray (SVP of Regulatory Relations), John Finneran and Gary Perlin with a range of Fed officials.

  It seems the Fed, ING and Capital One have already had something to hide in this transaction, including seeking to exclude from public comment and consideration ING illegally doing business in and with Syria, Iran, and Sudan. Now they seek to sweep through and under the carpet Capital One's proposed acquisition of the predatory lending platform of Household International from HSBC. But it will be opposed. Watch this site

August 8, 2011

On July 22, Inner City Press submitted to the Fed a formal FOIA request for

"the entirety of the below-captioned applications, and for all records reflected FRS communications with the companies at issue for the past 12 months, and up until the date of your final response to this timely request. There is a comment period, currently running through August 18, and we are requesting that you response as quickly as possible to allow any necessary FOIA appeal before the comment period closes. Please advise. Here are the applications / companies:

Capital One Financial Corporation, McLean, Virginia ING Bank, FSB, Wilmington, DE, & indirectly acquire voting shares of Sharebuilder Advisors, LLC, & ING Direct Investing, Inc., Seattle, Washington - operating a fsb & investment financial advisory& securities brokerage services - 225.28 4 Richmond 08/18/2011" (Emphasis added.)

Note that the request was for "all records reflecting FRS communications with the companies" -- Capital One and ING -- NOT, as mis-recited in the Fed's August 3 denial, only communications related to the application.

While we do not have to explain the reason for a FOIA request, for the record on the appeal, since we are alleging fair lending violations at Capital One, and sanctions and money laundering violations at ING, we have stated that we wish to review all non-exempt FRS communications about these companies and issues.

The Fed Denial also improperly seeks to limit the request to communications between FRS staff and the companies, excluding communications inside the FRS (or between the FRS and other parties) ABOUT the companies. This was requested, and in responses to other identically worded FOIA requests from ICP even just this year on Industrial & Commercial Bank of China, the Fed has provided intra-FRS emails about companies.

The Denial's blatant mis-quotation of the request denied access to these important records, seemingly intentionally so. Accordingly, we have immediately appealed and requested the improperly withheld records, and a rule, by the August 22 expiration of the comment period on the application, which should be extended as also requested by NCRC. We'll have more on this.

August 1, 2011

While the Federal Reserve tries to evade its duties under FOIA, most recently by claiming that it does not have to deal with request that are made in connection with comments on mergers, the Fed has for more than a week, in the face of two separate requests from Inner City Press, failed to maintain and fix its online FOIA submission form. The Fed may not want to be transparent, but the law requires it. Watch this site.


July 25, 2011

So the Federal Reserve has received Capital One's application to acquire ING, saying the comment period runs through August 18. But on July 24, the Fed's online e-FOIA form to request the application wasn't working, and the Secretary's Office didn't confirm receipt of a separately emailed request....

July 18, 2011

When the Fed hauled off and approved Comerica's Sterling application last year, it said that 2010 Home Mortgage Disclosure Act aggregate data is not available yet. This after the Fed received a timely comment that, among other things

“In 2010 for all loans, Comerica confined African Americans 6.26 times more frequently than whites to higher cost, rate spread loans. At Comerica, 11.3 percent of loans to African Americans were over the rate spread, versus only 1.9 percent of loans to whites.”

The Fed has enough 2010 HMDA data to review these disparities, but did not. For shame.

July 11, 2011

It has become clear that there is no legal basis for the government of China to have not applied. The BHC Act excludes US governments, not foreign; the Fed has simply read in an exemption. But consider: foreign governments can be subject to asset freezes, such as the one imposed by the UN Security Council and US government on Libya.

Clearly, ownership by foreign governments poses issues that ownership by US government entities does not. The Fed has been wrong to read an exemption, and should now require an application by the Chinese government. On the current record, these applications should not be approved.

After challenging withholdings, what I received behind a White & Case cover letter of June 30, 2011 is still incomplete. ICBC's counsel's letter dated June 6 says as to fair lending, “Please see Confidential Exhibit 1 (separately provided).”

Now belatedly a portion has been provided. But it refers to a interviews, then withholds the characterization. It says actions have been taken to ensure fair lending compliance - then withholds them. But

In the New York City Metropolitan Area, Bank of East Asia in 2009 made none of its conventional home purchase and refinance mortgage loans to African Americans and Latinos. Even among its Asian refinance borrowers, all had incomes over 100% of MSA median, mostly over 120% of median. In the Los Angeles MSA, all of Bank of East Asia's refinance leading was to Asians with incomes over 120% of MSA median.


Also still withheld: HMDA, second review, even future products, which make a mockery of the Fed's rules against ex parte communications. Other banks routinely provide copies of such answers, undermining any claim of competitive harm.

The comment period should be extended and no decision made until this improperly withheld information is provided. All non exempt portions of which should be released and the comment period extended, and all improperly withheld information provided.

We note that the signatory counsel for the Industrial and Commercial Bank of Bank is the former general counsel of the Federal Reserve Bank of New York, and believe that in this context it is particularly important that the information be provided and a public hearing held.

July 4, 2011

Four weeks after Industrial & Commercial Bank of China and its ultimate parent the Chinese government withheld the fair lending and future products portions of their submissions to the Federal Reserve, and Inner City Press complained, portions have now been released and the comment period on them extended though July 11. We will have more on this -- for now, consider this op-ed in the American Banker: http://www.americanbanker.com/bankthink/china-investment-corporation-bank-holding-company-act-1039482-1.html

June 27, 2011

The Federal Reserve's approval of Bank of Montreal to buy M&I, delivered the day BEFORE a public official's public hearing in Milwaukee, confines most of the issues to footnotes. Bailout? Note 16:

“Some commenters expressed concerns about the compensation to be paid to certain management at M&I Bank in light of M&I’s participation in Treasury’s Capital Purchase Program. As noted, M&I’s preferred shares held by Treasury under the program will be fully redeemed as part of this proposal. In addition, the Board has reviewed the financial and managerial factors in this proposal, including the compensation noted by commenters, in the context of the financial and managerial condition of the Applicants, M&I, and the resulting organization.”

Note 16: “Harris Central is a special-purpose bank exempt from performance evaluations under the CRA. 12 CFR 345.11(c)(3).”

For HMDA disparities, the Fed claims that the 2010 data, which it has yet to release, shows improvement. And on impacts on the community:

“A commenter expressed concern that the proposed acquisition would result in a loss of jobs. The effect of a proposed transaction on employment in a community is not among the factors that the Board is authorized to consider under the BHC Act, and the federal banking agencies, courts, and the Congress consistently have interpreted the convenience and needs factor to relate to the effect of a proposal on the availability and quality of banking services in a community.”

We'll have more, and soon, about the Fed's putative respect for what Congress says. Watch this site.

June 20, 2011

The Fed has hit a new low, saying it does not have to look at Morgan Stanley's Saxon ripping off military servicemembers because it's 24.9% of Morgan Stanley being acquired:

“A commenter asserted that recently announced losses at a joint venture between MUFG and Morgan Stanley reflect poorly on MUFG’s managerial capacity and its ability to avoid predatory lending. MUFG has reviewed management and controls at the joint venture and has strengthened its risk-management framework. In addition, MUFG has increased the amount of capital held by the joint venture. There appears to be no relationship between the losses at the joint venture, which engages in securities activities in Japan, and predatory lending, as asserted by the commenter.

“The commenter also referred to news reports regarding Morgan Stanley’s mortgage servicer, Saxon Mortgage Services, Inc., with respect to a class action lawsuit involving the Home Affordable Modification Program and a lawsuit under the Servicemembers Civil Relief Act. In addition, the commenter referred to a settlement by Morgan Stanley with the Office of the Attorney General of the Commonwealth of Massachusetts regarding allegedly unfair residential mortgage loans. As noted above, MUFG does not control the operations of Morgan Stanley and cannot exercise a controlling influence over its management. Moreover, as part of its ongoing supervision of Morgan Stanley, the Board monitors the status of government investigations, consults as needed with relevant regulatory authorities, and periodically reviews Morgan Stanley’s liability from material litigation.

“Finally, the commenter raised allegations that are outside the limited statutory factors that the Board is authorized to consider when reviewing an application under the BHC Act.”

A new low....

June 13, 2011

Industrial and Commercial Bank of China, already asking that the plain language of the Bank Holding Company Act be ignored, is now further thumbing its nose at the public and the Fed's normal process. After a CRA challenge to its application to acquire 80% of Bank of East Asia, the Fed asked ICBC six questions, including one on fair lending and another on CRA.

ICBC is required to send a copy of its answers to those who protested. But what Fair Finance Watch got is a letter that quotes the Fed's questions, then says as to fair lending, “Please see Confidential Exhibit 1 (separately provided).” As to CRA (Question 2), ICBC says “Please see Confidential Exhibit 2 (separately provided).”

ICBC's lawyer Ernest Patrikis used to be the General Counsel of the Federal Reserve Bank of NY. Other banks routinely provide answers to such questions to those who have commented. Watch this site.

June 6, 2011

So the Federal Reserve has a rule against ex parte communication, in which a protested bank is required to send copies of its communications to the Fed to the protester. But when Comerica and its law firm wrote to the Fed on May 25, the copy they sent to Fair Finance Watch by regular mail mostly referred to a separate letter that they did not provide. They wrote, in response to a question about fair lending, that “Comerica Inc has provided detailed information regarding Comerica Bank's fair lending policies, procedures and practices in the April 5, 2001 letter.” So where's that letter?

May 30, 2011

The response by former Federal Reserve Bank of New York chief counsel Ernest Patrikis to the New York Fed itself cites as authority that a foreign government need not apply to the Fed to own a bank in the US... a statement by Fed's general counsel Scott Alvarez. Talk about circular. More on this to come.

May 23, 2011

Does the Federal Reserve System have any rules about being lobbied or allowing bank representation by its previous officials? For now what we can say is that Ernest Patrikis, formerly the general counsel of the Federal Reserve Bank of New York, is sending letters to that same FRBNY, for example on May 17, 2011. It has been questioned, so far without response. Watch this site.

May 16, 2011

When the Federal Reserve hauled off and approved Hancock's application to buy Whitney, it had to ignore glaring disparities in Hancock's lending. It also had to brush over anticompetitive effects, especially but not only in the Biloxi market. Governor Tarullo issued a separate “concurring” statement, placing weight on that the institution that proposes to purchase the branches to be divested is competitive suitable. Sleight of hand? We'll see.

May 9, 2011

Thus spake Alan Greenspan: ““No one’s interests are served by the imposition of ineffective or burdensome rules that lead to excessive increases in costs or unnecessary restrictions in the supply of credit.” Except that's Ben Bernanke, last week, in Chicago...

May 2, 2011

The Federal Reserve on April 26 approved M&T's application to acquire Wilmington Trust, with largely the same boilerplate about HMDA data not proving anything, and the Fed not requiring (or considering) CRA commitments.

Interestingly, esp. in light of the Fed's new claims of transparency exemplified by Bernanke's first press conference last week, the Fed's April 26 M&T order in footnote 39 says that Governor Sarah Raskin abstained from the vote on the application. http://www.federalreserve.gov/newsevents/press/orders/orders20110426a1.pdf

In a return phone call to the same Federal Reserve staffer who called to announce the approval, Inner City Press has asked the Fed to state the basis for the abstention, but note the report that the Obama administration is considering Raskin (as well as former Michigan governor Jennifer Granholm) to head the Consumer Financial Protection Bureau. http://www.reuters.com/article/2011/04/06/financial-regulation-consumer-idUSN0621321820110406

But days later, the Fed has not responded. Watch this site.

April 25, 2011

With Fed chairman Ben Bernanke set to take questions on April 27, it's amazing how limited it is to monetary policy. The Fed had a bank regulation role, negligence in which allowed for the financial meltdown. So how about these questions:

“Why is the Fed limiting its review of financial conglomerates' involvement in subprime lending to their retail lending, even now, and not their investment banking roles that allowed for the financial meltdown?”

This was done by the Fed, on the record in its orders, on recent applications by Japanese banks -- and prospectively, other Asian banks.

“Since the Fed allowed Goldman Sachs and Morgan Stanley in the world of commercial banking on an “emergency” basis with no public comment or review under the Community Reinvestment Act, what have you done since to review their CRA compliance?”

Watch this site.

April 18, 2011

Inner City Press / Fair Finance Watch has asked both the Federal Reserve Board and Federal Reserve Bank of New York for full copies of applications, and to rule on any needed FOIA appeal before the expiration of a comment period on May 12. We'll see.

Sleaziest response we've seen in a while: Bank of Montreal's law firm Sullivan & Cromwell argued to the Federal Reserve, in an April 13 response to Inner City Press / Fair Finance Watch's comments, that “Commenter's challenge to the redactions in the Comment Letter is misplaced and not the proper subject of the public comment process, which is focused on the statutory factors the Board must consider under the BHC Act in evaluating the Application.”

But the information Bank of Montreal has blacked out is fair lending information that the Fed requested after the Application was protested. Bank of Montreal was required to send its response to Inner City Press, but withheld most of it. To argue that it's not related to the Application is ridiculous. But this is why we resist the Fed trying to disconnection FOIA from the Application (and CRA challenge) process...

April 11, 2011

The Federal Reserve has STILL not ruled on Inner City Press' March 20 Freedom of Information challenge to Bank of Montreal withholding whole chunks of its fair lending response in connection with its CRA challenged M&I application. Meanwhile the Fed let the comment period close.

April 4, 2011

The Federal Reserve, which granted Inner City Press a one week extension of the comment period on Bank of Montreal / Harris - M&I due to withheld portions of BMO's application, has refused to rule on a simple FOIA demand for radically redacted fair lending information submitted by Bank on Montreal. The Fed is inconsistent and secretive, to put it mildly.

March 28, 2011

So while the Fed gave Inner City Press a one week extension of the comment period on Bank of Montreal's application to buy M&I, based on the withholding of information by Bank of Montreal, the Fed has yet to address Bank of Montreal's radical redaction of its fair lending responses. And the Fed explicitly denied extension request by other groups, apparently for not having requested the record early in the process. But if the Fed will wait to hear one group's comments, why not others'?

March 21, 2011

The Fed still doesn't seem to understand that predatory lending is not only attributable to retail lenders. In their order last week, the Fed Governors say Inner City Press

“asserted that both CMTH and STB have been involved in the subprime and predatory lending industries in the United States and that the proposal could increase such activities in the combined organization. Neither CMTH nor STB engages in any retail lending activities in the United States (including subprime lending). Although both Japanese banking organizations incurred losses before 2009 on subprime-related investments, current financial reports show that both CMTH and STB significantly reduced their holdings in these investments.”

And what about those “subprime-related investments”? Watch this site.

March 14, 2011

The Federal Reserve on March 11 hauled off and approved Goldman Sachs' application to take stake in Avenue Bank, then called Inner City Press / Fair Finance Watch to say that, as the commenter, ICP has two weeks to ask reconsideration. The Fed's Order recited for example that

“The commenter expressed concern about subprime loans originated by Fremont

Investment and Loan (“Fremont”) that the commenter has alleged were acquired by Litton. Fremont was a subprime lender whose parent, Fremont General, filed for bankruptcy in 2008. Litton acquired the servicing rights for loans originated by Fremont but did not acquire ownership of the loans and was not involved in originating them.”

The Order goes on to say that

“The Federal Reserve is conducting an in-depth review of practices at Litton and other large mortgage servicers, including a review of internal controls and processes related to all aspects of servicer operations. The Federal Reserve has supervisory authority over bank holding companies and their nonbank subsidiaries and may take supervisory or other actions in connection with those reviews, as the Board determines to be appropriate. In addition, as part of its supervisory process, the Board will continue to monitor the operations of Litton as well as other Goldman subsidiaries to ensure that their processes and procedures comply with applicable consumer protection laws and regulations.”

We'll see. Meanwhile on Hancock - Whitney

“Jean Tate, a spokeswoman for the Federal Reserve Bank of Atlanta, said that when the Fed receives comments that are material, it forwards them on to the applicant for a response and then shares that response with the commenter, who has a chance to respond. The process has the potential to become a lengthy back-and-forth, and the correspondence becomes part of the record that the Federal Reserve ultimately considers.Tate couldn't say how common it is for proposed mergers to elicit public comments, whether Fair Finance Watch's opposition to the Hancock-Whitney deal has been deemed material, or how long it might take to evaluate the group's fair lending concerns. 'It could be part of what's considered in the approval process,' she said.”

March 7, 2011

Note that the Connecticut Banking Department is holding hearings on First Niagara's application to acquire NewAlliance, on March 8 and 9 -- while the Federal Reserve closed its comment period with many questions unaswered, and hasn't ruled on any bank merger proposal this year, preferring to rubber stamp at the Reserve Bank level...

February 28, 2011

Here's an example of why the Federal Reserve trying to separate FOIA requests related to applications from the comment period: the Fed had extended its time to respond to Inner City Press / Fair Finance Watch's January 13 FOIA request about M&T / Wilmington Trust -- until long after the comment period. And when WILL we get the documents?

February 21, 2011

So the Federal Reserve Board hasn't ruled on a single bank merger proposal so far in 2011. The pace of mergers slowed, sure -- but also the Fed has tried to confine more and more decisions to the Reserve Banks, which can ONLY approve applications. And on the First Niagara - NewAlliance proposal, now the Connecticut regulator, unlike the Fed, has scheduled public hearings. Will the Fed send anyone? And will it grant the requests for public hearings on Bank of Montreal / Harris - M&I?

February 14, 2011

Bank of Montreal has now submitted its application to the Federal Reserve Bank of Chicago for its proposed acquisition of M&I. On February 11, Tom Naughton of the Chicago Fed left Inner City Press a message that the application had been received, and would be send out Monday. It can be requested via

Federal Reserve Bank of Chicago, Attn: S&R Applications Unit - 14 C, Federal Reserve Bank of Chicago, 230 South LaSalle Street, Chicago, Illinois 60604, Fax 312-322-5894

A 30 day comment period is about to begin...

February 7, 2011

So now the Federal Reserve Bank of New York instructs “do not mix requests with comment letters.” Inner City Press replied on February 2 that

“the reason we link the FOIA request to comment on the application is that we are requesting the information in order to comment on it -- otherwise, we get FOIA responses after the comment period is close or application ruled on. Could you provide the email address (rather than form) of the Federal Reserve's FOIA office? Thanks in advance.”

But the Fed has yet to response in any way...

January 31, 2011

Several banks, and some community groups, are beefing about the Federal Reserve's Loan Officer Compensation rule, which they say may undermine CRA lending. We'll see.

January 24, 2011

Federal Reserve Bank of Kansas City President Thomas Hoenig has spoken in favor of dismantling large banks. And the other Fed officials?

January 17, 2011

M&T has now applied to the Federal Reserve to buy Wilmington Trust. Inner City Press / Fair Finance Watch has requested the application from the New York Fed, so far without response. Watch this site.

January 10, 2011

So why DID William Dudley of the New York Fed meet, during the FOMC black out period, with Jaime Dimon of JPMorgan Chase, John Mack of Morgan Stanley and Lloyd Blankfein of Goldman Sachs? Here's hoping that Congress requires answers.

January 3, 2011

Guess who has a YouTube channel? The Federal Reserve Board, of course -- but the comment function is disabled...

December 27, 2010

There's something either cheesy or endearing about the Fed putting on its website links to Bernanke's appearance on 60 Minutes, including unaired footage.

December 20, 2010

The Federal Reserve has hit a new low in the Caja Madrid case. A merger of Spanish savings banks which own, among other things, amusement parks and lenders down to the Canary Island, several banks would come to own City National Bank of Florida, whose lending to African Americans has been in decline. But the Fed rushed it through to meet a Spanish deadline, despite the lack of any response from Caja Madrid or City National Bank of Florida.

December 13, 2010

Is the Federal Reserve just a rubber stamp for mergers in other countries despite their impact in US? Caja Madrid and others are merging in Spain, including a savings bank which owns amusement parks and “other lenders... in the Canary Islands.” Meanwhile while Caja Madrid has owned City National Bank of Florida, its lending to African Americans has decreased. With this now timely raised to the Fed, and Caja claiming there's no need to response -- it wants a fast merger in Spain -- will the Fed ask the right questions?

December 6, 2010

Inner City Press / Fair Finance Watch last week commented to Federal Reserve against the applications of First Niagara to acquire and merge with NewAlliance. This followed the New York Fed delaying response to ICP's FOIA request for the application, and then trying to charge money.

First Niagara's acquisitions have resulted in a decrease in availability of credit, especially to low and moderate income people and communities of color. It has seemingly been allowed to make acquisitions, for example its still undigested entry into Pennsylvania, due to the financial meltdown (and, we assert, the regulatory agencies' concerns about their own role in allowing the business practices that led to the meltdown).

Now, it is imperative that First Niagara's actual record, including on all recent acquisitions, be fully reviewed including at the requested public hearings, before another set of communities is subjected to First Niagara's practices.

Inner City Press raised some of these concerns when First Niagara went into Pennsylvania. At that time, the target bank was so weak it arranged by stealth a loan from First Niagara before any regulatory approval had been granted: gun-jumping. While the exigencies of the financial meltdown and First Niagara's representation by a highly connected white shoe law firm got it over that hump, in the time since First Niagara has not performed anywhere near adequately in the communities which it was allowed to enter.

To the degree that First Niagara may try to emphasize the alleged performance of NewAlliance rather than its own, we note previous issues regarding NewAlliance, including extensive opposition to its formation from New Haven Savings Bank, the “golden parachute” of its top leadership and CRA issues regarding its performance, to be explored and documented at the requested public hearing.

November 29, 2010

The Federal Reserve is being sued by TCF in Minneapolis...

November 22, 2010

From Governor Duke last week: “the lack of certainty and price discovery created by the glut of foreclosures has further weakened property values and has contributed to a slowing in the recovery of the housing market more generally.” And on a moratorium?

November 15, 2010

Now First Niagara has applied to the Federal Reserve to buy NewAlliance, with a comment period running through December 3. Both in New Haven, NewAlliance's base, and in the communities ostensibly served by First Niagara, there are concerns. First Niagara has until now been allowed to grow quickly, but has barely integrated or served the areas it has move into. Its systems are weak. In terms of a CRA a single officer, based in Buffalo, runs the show. A request has been made for complete copy of the application. Watch this site.

November 8, 2010

The Federal Reserve's H2A of November 5 listed the First Niagara - New Alliance application, with comment period running through December 3:

First Niagara Financial Group, Inc., Buffalo, New York to acquire 100 percent of the voting shares of New Alliance Bancshares, Inc., and thereby indirectly acquire voting shares of New Alliance Bank, both of New Haven, Connecticut 3 New York 12/03/10

We're all over it. Watch this site.

November 1, 2010

Why isn't a Federal Reserve Board review required for this? “Citigroup Global Markets Ltd. has bought the Israeli government's entire 11.69% stake in Israel Discount Bank Ltd. (DSCT.TV) for 832 million shekels ($231 million) and will distribute those shares to other institutional investors, Discount Bank said Tuesday” of last week.

October 25, 2010

Even with new Governors installed, the Federal Reserve Board is considering fewer and fewer comments on bank expansion applications. Those protests which the Federal Reserve System does receive are increasingly bottled up at the Reserve Bank level, with cursory and incomplete summaries given to the governors. This has been raised to the new Governors. What will they do?

October 18, 2010

The six Federal Reserve Board governors were confronted last week with their failure to inquire into the facts of applications for Fed approval which are subject to protest under the Community Reinvestment Act and otherwise.

Inner City Press / Fair Finance Watch has raised the way the Federal Reserve Bank of New York has bottled up protests about Morgan Stanley and now the Middle East by rubber stamping deals at the local level, with no Board review.

Fed chairman Bernanke for the second time said that it's “perverse” that CRA is enforced on merger applications. But it is the law, and the person charged with following the law shouldn't brush it off.

Also raised was the way that, even when protested applications go to the Board, Fed staff omit from their summaries issues they think are not relevant or can be excluded - including for example involvement in predatory lending by a bank's affiliates. Even wonder why the Fed is blind?


October 11, 2010

Even District Judge Ellen Huvelle sees Citigroup's settlement with the SEC as a sell out of consumers. The SEC said in a letter to this U.S. district judge that Citigroup Inc. will be required to have stringent reforms that would ensure the bank's disclosures are adequate for investors. The judge has had expressed concerns about the $75 million proposed settlement between Citigroup and SEC, saying she needed assurance that the bank would maintain improved disclosure practices. Oh that there had been judicial oversight over CitiFinancial's $75 million settlement on the cheap with the Federal Reserve, whcih reformed near to nothing...

October 4, 2010

So Bernanke last week said the media ten to “make the good times too hot and the bad times too cold.” This from a man who, like his predecessor, ignored timely comments that Citigroup et al were predatory lenders...

September 27, 2010

From Federal Reserve Governor Elizabeth Duke's September 24 statement on the Home Mortgage Disclosure Act:

“the recent mortgage crisis has highlighted the potential ramifications of a mortgage market that is not functioning well. HMDA data do not create the market or solve all market problems, but they do help us understand what is happening in the market. The time is certainly ripe for reviewing and revising the data elements, standards, and reporting formats.”

But the Fed was presented, repeatedly, with showings based in significant part of HMDA data, of CitiFinancial, Wachovia, New Century, Ameriquest and the like, that predatory and discriminatory lending was taking off. And the Fed did nothing...

September 20, 2010

Speaking at the Federal Reserve's September 24 session on HMDA are representatives of Bank of America and the American Securitization Forum. And what might they be saying?

September 13, 2010

From helicopter Ben Bernanke: "The new financial reform law and current negotiations on new Basel capital and liquidity regulations have together set into motion a three-part strategy to address too-big-to-fail." We'll see.

September 6, 2010

On July 21, the Fed met with Visa about interchange fees. After that, Bank of America Corp., J.P. Morgan Chase & Co. and American Express. Goldman Sachs Group Inc., Citigroup Inc. and others have also discussed tough rules for derivatives with government officials. Citi executives, meeting with the Fed on Aug. 18, expressed concerns about the effect of the new rules on U.S. firms. "Citigroup representatives also expressed concerns about a narrow interpretation of the definition of hedging and the importance of retaining their ability to hedge across markets," the summary prepared by the Fed said....

August 30, 2010

The Federal Reserve System announced on August 26 that it “will sponsor a national summit on September 1 and 2 to discuss methods and resources for encouraging neighborhood stabilization in the aftermath of the U.S. home mortgage foreclosure crisis.” The Fed said that “summit speakers include Governor Duke; U.S. Department of Housing and Urban Development Secretary Shaun Donovan; Federal Reserve Bank Presidents Charles Evans (Chicago), Sandra Pianalto (Cleveland), and Eric Rosengren (Boston); and representatives of various sectors involved in the foreclosure process and community stabilization efforts.” And who are those?

August 23, 2010

Federal Reserve Governor Elizabeth Duke said in Chicago, “Any changes we make to the regulation should retain the flexibility that has been integral to the CRA’s success” -- that is, leave things arbitrary...

August 16, 2010

The Federal Reserve's agenda for its CRA hearing in Los Angeles on August 17 needs but does not have several disclosures. A former Fed official is appearing for a bank and trade association. Worse, JPMorgan Chase's former CRA officer is testifying early, listed only as a professor. This type of laxity both explains the Fed's blindness to the subprime melt-down and why many would like regulatory functions stripped from the Fed...

August 9, 2010

Timothy Geithner, the former NY Fed President who didn't pay his taxes, is now thumbing his nose at the portions of the Volcker Rule that Sen. Levin and others managed to enact. Hey, if you don't like the laws --- and you don't -- maybe it's time to leave?

August 2, 2010

Even as Wells Fargo is the subject of a governmental charge of predatory lending, by the Pennsylvania Human Relations Commission, the Federal Reserve has put David Moskowitz, Deputy General Counsel, Wells Fargo & Company on its formal panel on the Home Mortgage Disclosure Act on August 5... Discuss this: Inner City Press / Fair Finance Watch has analyzed the 2009 data, which it obtained from Wells Fargo, and has found that in 2009, Wells Fargo Bank NA confined African Americans to high cost mortgages 2.40 more frequently than whites. Its disparatiy for Latinos was 2.09. For its subprime affiliate Wells Fargo Funding, the disparities in 2009 were even worse that the bank, and those cited by the Pennsylvania Human Relations Commission: African Americans were confirmed to high cost loans four times more frequently than whites.

July 26, 2010

Here's what the Fed said last week in considering Inner City Press / Fair Finance Watch analysis of disparities in Toronto Dominion's 2009 HMDA data:

Although the HMDA data might reflect certain disparities in the rates of loan applications, originations, denials, or pricing among members of different racial or ethnic groups in certain local areas, they provide an insufficient basis by themselves on which to conclude whether or not TD is excluding any racial or ethnic group on a prohibited basis. The Board recognizes that HMDA data alone, even with the recent addition of pricing information, provide only limited information about the covered loans.30 HMDA data, therefore, have limitations that make them an inadequate basis, absent other information, for concluding that an institution has engaged in illegal lending discrimination.

The Board is nevertheless concerned when HMDA data for an institution indicate disparities in lending and believes that all lending institutions are obligated to ensure that their lending practices are based on criteria that ensure not only safe and sound lending but also equal access to credit by creditworthy applicants regardless of their race or ethnicity. Moreover, the Board believes that all bank holding companies and their affiliates must conduct their mortgage lending operations without any abusive lending practices and in compliance with all consumer protection laws.

Because of the limitations of HMDA data, the Board has considered these data carefully and taken into account other information, including examination reports that provide on-site evaluations of compliance by TD’s subsidiary insured depository institutions with fair lending laws. The Board also has consulted with the OCC, the primary federal supervisor of TD’s subsidiary banks. In addition, the Board has considered information provided by TD about its compliance risk-management systems.

So no matter how disparate the data, the Fed will rebut it with confidential mumbo jumbo...

July 19, 2010

Governor Duke, at the HMDA hearing in Atlanta on July 15, intoned

“HMDA has three purposes. One purpose is to provide the public and government officials with data that will help show whether lenders are serving the housing needs of the neighborhoods and communities in which they are located. A second is to help government officials target public investment to promote private investment where it is needed. A third purpose is to provide data to assist in identifying possible discriminatory lending patterns and facilitate the enforcement of anti-discrimination laws, such as the Equal Credit Opportunity Act.”

Why then do Fed orders on contested merger now by rote say that HMDA doesn't prove anything?

July 12, 2010

The Federal Reserve Bank of New York said Friday that a broad legal release that was part of agreements in 2008 to cancel credit-derivative contracts between American International Group Inc. and various banks was put forth by lawyers for the insurer and accepted by the regional Fed bank.

This is another reason that Federal Reserve Board -- governmental -- decisions should be made by the non-government Reserve Banks. We'll have more on this, including regarding Morgan Stanley...

July 5, 2010

On June 30, the Federal Reserve System approved a Morgan Stanley application which Fair Finance Watch had challenged in April, based on Morgan Stanley's subprime Saxon Mortgage subsidiary and Morgan Stanley, among other things, funding makers of cluster bombs.

Amazingly, the day AFTER the Fed sent its conclusory approval letter, it released improperly withheld information to FFW:


Date: Thu, Jul 1, 2010 at 10:08 AM
Subject: Morgan Stanley Application
From: Federal Reserve
To: fairfinancewatch.org

Good morning Mr. Lee:

Previously, you'd requested a copy of Morgan Stanley's Section 3 application.  The business plan was not properly redacted by Morgan Stanley.  I have attached the application below for you.

Best,

Kimberly Hooks

This information should have been released during the comment period, and certainly prior to approval. In fact, “Mortgage” activities are still improperly redacted. On this basis alone, the approval should be rescinded...

Watch this site.

June 28, 2010

Game on: Inner City Press / Fair Finance Watch has filed a timely challenge with the Federal Reserve to the pending applications of The Toronto-Dominion Bank to acquire The South Financial Group and its Carolina First Bank.

FFW obtained TD's 2009 HMDA-LAR, which has not been reviewed or taken into account in any regulatory review of TD. The data are troubling, showing for example that in 2009 Toronto Dominion denied fully 83% of mortgage loan applications from African Americans, versus only 42% of applications from whites. TD's denial rates for Latinos and Native Americans, both 68%, were also troubling. Public hearings should be held and the applications not approved.

TD in fact makes rate spread or subprime loans, but not in a fair manner. African Americans at TD are 1.93 times more likely to be confined to higher cost loans than whites.

While the FRB, despite the stated purpose of HMDA in helping to identify discrimination, has shifted to a dismissive approach to HMDA, it will be hearing different at its upcoming HMDA hearings, testimony at which should be considered by the FRB in connection with this application.

On a recent investors' conference call, TD bragged about its “FDIC-assisted transactions” -- which , significantly, were not reviewed for CRA, and on which there was no comment period. A public hearing is needed on this one. FFW's request in this letter for a complete copy of the applications includes also any and all information in the possession of the FRS concerning TD's “FDIC assisted transactions.”

Meanwhile, shareholders of South Financial have filed suit against the deal. See, e.g., Greenville (SC) News, June 22, 2010. TD has told its shareholders it will somehow convert fast food restaurants into bank branches. See, e.g., Globe & Mail, June 17, 2010. Before serving up its disparate lending, public hearings should be held. These issues must be explored, under managerial and financial factors, in connection with these applications. FFW has requested public hearings.

June 21, 2010

So as (for now) agreed, the Presidents of the Reserve Banks would still be selected by the Reserve Bank boards, only the three bankers on each couldn't vote. But is that enough of a safeguard?

June 14, 2010

Lame (duck) -- "Vice Chairman Donald L. Kohn announced on Friday that, at the request of Federal Reserve Chairman Ben S. Bernanke, he plans to remain on the Board until a new Governor is appointed but to leave no later than September 1. He had announced in March that he intended to resign at the expiration of his term as Vice Chairman on June 23, 2010. While he remains on the Board as a Governor, he will continue to participate in all Board and Federal Open Market Committee meetings."

June 7, 2010

The Federal Reserve's Consumer Advisory Council will meet on June 17, about the Community Reinvestment Act. A push is on to block any Congressional expansion of the CRA by saying that much can be done by regulatory moves, by the Federal Reserve. The Fed had a long time to do this, and never never moved to examine BHC subsidiary subprime lenders. Too little, too late.

May 31, 2010

So Morgan Stanley has purported to respond to comments Fair Finance Watch filed with the Federal Reserve, opposing Morgan Stanley applications subject to the Community Reinvestment Act. It is an arrogant response, largely that FFW's points about predatory mortgage servicing and "other predatory practices, including 'land grabs' and the financing of 'cluster bombs.'"

Its vague response on these last two is that "Morgan Stanley and its subsidiaries engage in corporate underwriting and lending activities for various clients, including those involved in national defense related activities. Morgan Stanley also engages in real estate investment activities on a global basis."

It's Morgan Stanley which put "cluster bombs" in quotation marks. To those impacted, air quotes will not help. Same with the victims of the predatory loans services by Morgan Stanley's Saxon, or of loans enabled by Morgan Stanley as an investment bank.

Morgan Stanley admits to a Saxon settlement in Missouri, and to not timely responding to consumer complaints. Yet it argues that none of this is relevant to the Federal Reserve. Like we said, arrogant. And to be continued.

May 24, 2010

So in the Senate bill that passed, and in whatever comes out of Conference, do the clearinghouses -- "designated financial markets facilities" -- have emergency access to to Fed lending and funding programs? This we aim to find out. For now, here was

May 17, 2010

Too little, too late: After demanding last year that Citi fill its board with more financially savvy directors and improve its risk management, Fed officials in Washington pressed the New York Fed to follow up with tough oversight, people familiar with the matter said.

"The supervision program for Citigroup has been less-than-effective," the Fed board said in a draft of a review of the New York Fed's performance last year, according to documents released by the bipartisan Financial Crisis Inquiry Commission. The final review said Mr. Dudley's staff "did not take timely and appropriate action" to follow up on the Fed's demands in a memo of understanding with a big bank. A Citi representative declined to comment.

May 10, 2010

The Federal Reserve is advocating for itself:

"Charles Plosser of the Philadelphia Fed, Thomas Hoenig of the Kansas City Fed, Jeffrey Lacker of the Richmond Fed and Narayana Kocherlakota of the Minneapolis Fed have met with the Joint Economic Committee of Congress opposing the proposal under which the Federal Reserve would oversee banks with more than $100 billion in assets, while smaller institutions would be regulated by other agencies. The Fed banks also oppose a provision that would make the president of the New York Fed a presidential appointee, calling it an attempt to politicize the agency appointee, calling it an attempt to politicize the agency."

What -- so it's better to have banks, which own stock in the Federal Reserve Banks, regulate themselves?

May 3, 2010

As Goldman Sachs is belatedly grilled in Congress, so to at the Federal Reserve. Last week Inner City Press ' Fair Finance Watch put in a comment that began this way:

RE: Timely Opposition and Hearing Request on the Applications The Goldman Sachs Group to acquire, inter alia, up to 24.9 percent of SKBHC Holdings LLC, Corona del Mar, California, which is applying to become a bank holding company, & thereby indirectly acquire Starbuck Bancshares, Inc.& The First National Bank of Starbuck

Dear Chairman Bernanke and others in the FRS:

On behalf of Inner City Press' Fair Finance Watch, this is a timely comment opposing and requesting public hearings on Goldman Sachs' above captioned pending applications, which were re-noticed on the Board's H2A.

As you know, Goldman Sachs was allowed to become a bank holding company without any public comment period or consideration of the Community Reinvestment Act, which would otherwise have been required. Since then, and since 2009, Goldman Sachs has been charged with misrepresentation by the SEC. The emails which recently emerged, about the failure of little subprimes and selling toxic bonds to widows and orphans, militate for public hearings on these Goldman applications. See also, since October, the NY Times' ""Testy Conflict With Goldman Helped Push A.I.G. to Edge."

We are requesting, in connection with this application, a full disclosure of any and all assistance Goldman Sachs received from the Federal Reserve System in the past four years.

On the consumer side, Goldman Sachs has been charged with involvement in predatory lending, including for the acts of its subprime servicing subsidiary, Litton Loan Servicing. Even Goldman's settlement left the public in the dark. See, e.g., Bloomberg News, May 17, 2009, "Deal in Goldman probe leaves public in dark."

April 26, 2010

Inner City Press / Fair Finance Watch filed timely comments with the Federal Reserve Board opposing applications by Morgan Stanley, moving its banking around. The grounds are its subprime affiliate Saxon, as well as general sleaze, from land grabs to financing cluster bombs. Will the Fed care? Watch this site.

April 26, 2010 - click here for BloggingHeads.tv debate on Afghanistan cover up, Bhutto, Iran, Sudan and the UN's Love Boat in Haiti, by Inner City Press

April 19, 2010

In an otherwise bland speech in Arlington we've gone back to find, Fed governor Tarullo said CRA "requires that we, as regulators,, evaluate financial institutions' performance in meeting those credit needs and to consider that performance, as reflected in individual institutions' CRA ratings, when reviewing applications for mergers, acquisitions, and branches." The phrase that performance is reflected in CRA rating -- over 98% of which are Satisfactory or Outstanding -- makes it appear that a CRA "safe harbor" was enacted. But it wasn't...

April 12, 2010

"Call them 'too big to be fair' -- the banks the regulators have favored, allowing emergency takeovers like JPMorgan Chase's of Washington Mutual, Bank of America's of Countrywide and Merrill Lynch, and Wells Fargo's of Wachovia, were the most racially disparate lenders," said Fair Finance Watch. "The regulators did not put any conditions on the mergers or Troubled Assets Relief Program bailouts. As things are going, it will be worse and more disparate in 2010. The administration in Washington has yet to make any substantive change to this, seems ready to accept consumer protection under the compromised Federal Reserve. Global predatory lending seems unlikely to be discussed at the G-20 finance ministers' meeting in Washington later this month. The disparities in the 2009 mortgage data of the big four militate for breaking up these banks."

The weakness of the Federal Reserve as regulator on this was highlighted by the March 24 settlement by CitiFinancial when non-reporting of loans under HMDA was discovered by Massachusetts authorities - and not the Fed, which is putatively regulating CitiFinancial.


April 5, 2010

This week the Angelides Commission will hear from Alan Greenspan, Robert Rubin and Chuck Prince. This goes back to the Citicorp - Travelers merger and teh Fed's pre-appoval, about which Inner City Press was asked this week:

When Travelers met and swallowed Citicorp in 1998, the Federal Reserve didn't just approve an illegal merger -- it illegally pre-approved an illegal merger. Sandy Weill and John Reed and their lawyers got the green light from the Alan Greenspan Fed before even announcing the merger. The group I worked and work with, Inner City Press/Fair Finance Watch, demanded all records of the meetings, but got only two cryptic letters, talking about the marriage of "Red" and "Blue." The Fed approved, and predatory lending took off. And now in the aftermath, even the Chris Dodd bill would house consumer protection inside the same Federal Reserve, a huge mistake. Red and Blue indeed...

March 29, 2010

The Fed is belatedly concerned -- but not too concerned. Following Inner City Press / Fair Finance Watch's comments, the Fed conducted an after the fact inquiry and in an approval order last week included this footnote:

A comment from the public expressed concern that FNF Group acquired control over Harleysville before obtaining Board approval of the application because of an extension of credit FNF Group made to Harleysville. In December 2009, and after FNF Group filed its application with the Board to acquire Harleysville, FNF Group loaned Harleysville $50 million, secured by the shares of Harleysville Bank. Harleysville invested the loan proceeds in Harleysville Bank to increase the bank's capital.

The Board is concerned when a banking organization seeking to acquire . another banking organization makes a loan to the acquiree in advance of the Board's approval of the acquisition. Those types of loanss raise concern thatthe transactionon would ~e, in substance, the acquisitioof af a controlling interest or would provide the acquirer with the ability to exercise a controlling influence over the management and policiof thethe bank holding company before receiving Board approval. The Board has reviewed carefully the loan to Harleysville, including the circumstances and terms of the loan, the merger agreements, the purpose of the loan, and the relationships of the organizations after the loan transaction. Based on all the facts of recordd, the Board does not believe that the loan resulted in FNF Group acquiring voting securities of, or a controlling equity interest in, Harleysville, or in FNF Group exercising, or having the ability to exercise, a controlling influence 'over Harleysville in this case. The Board continues to believe that loans made by an acquirer to a target organization before agency approval of its acquisition proposal raise important issues, and it will review these arrangements critically and carefully.

But the Fed apparently didn't know about the loan until it was raised in comments, and it let the deal go forward, after reams of arguments by banking insider H. Rodgin Cohen. This is another example of Fed lassitude, another reason that consumer protection should not be put under the Fed....

March 22, 2010

Typical Fed lack of transparency: Matthew M. Collette, a lawyer for the Fed's board of governors, argued in January that banks would be less likely to use the discount window and other lending-of-last-resort programs if they know their use would be made public. He said at the time that accessing the window carries a negative connotation if use was made public, even when a healthy bank suffering a short-term liquidity issue does it.

"The requirement of disclosure under FOIA and its proper limits are matters of congressional policy," U.S. Circuit Judge Dennis Jacobs wrote in the Bloomberg decision. "The statute as written by Congress sets forth no basis for the exemption the Board asks us to read into it. If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute."

The 2d Circuit Court of Appeals has upheld the slap down of the Federal Reserve for withholding information about a portfolio of securities supporting a loan extended by the Fed in connection with J.P. Morgan Chase & Co.'s acquisition of Bear Stearns...

March 15, 2010

That the Federal Reserve's own consumer advisers said the agency is not qualified for consumer protection is damning. And some current CAC members who declined to sign did not only because they are just entering and don't want to immediately bite the hand that feeds, or at least flies, them. The Fed has put consumer financial protection on the agenda of the next meeting of its CAC...

March 8, 2010

And now the Federal Reserve (Bank of NY) doesn't even acknowledge the receipt of timely comments on the deals it's supposed to consider. And this is the agency that wants to be in charge of consumer protection?

March 1, 2010

While some are focusing on the personal profit of former NY Fed head Freidman from the AIG bail out, how about Corrigan re-surfacing flacking for Goldman Sachs on its paid Greek deceptions?

February 22, 2009

Speaking in Puerto Rico last week, Bill Dudley the new president of the New York Fed -- successor to Tim Geithner -- said while he'd visited La Isla del Encanto as a kid, this was his first visit in his "current role." He bragged about the Fed, "during CRA Week," highlighting "products especially suited to the Puerto Rican market." Are we -- or was he -- talking subprime?

February 8, 2010

In his February 3 speech barely claiming his second term as Fed chairman, Ben Bernanke bragged about the Fed's transparency, despite its withholding of information about mergers and consumer protection as well as bail outs. He said

"The Federal Reserve is already one of the most transparent and accountable central banks in the world, providing voluminous information and explanation concerning all of its activities. However, I believe that we should be prepared to do even more, to become even more transparent. It is essential that the public have the information it needs to understand and be assured of the integrity of all our operations."

Having had to litigate Freedom of Information Act cases with the Fed, which hid information about mergers and about banks' ownership of subprime lenders, we disagree.

February 1, 2010

While Inner City Press Fair Finance Watch has opposed and appealed Goldman Sachs' withholding of large portions of its submission to the New York Banking Department in response to ICP's protest of Goldman's branching application to the NYBD, it's worth making a comparison to the Federal Reserve.

Goldman Sachs must be relying on favoritism from the Fed -- while ICP has protested another Goldman application to the Fed, Goldman's response to the Fed was much more conclusory than to the NYBD. One can conclude that the Fed is a weak regulator -- and, relatedly, that it receives less information from the industry, as least on subprime questions, for that reason.

Citigroup jacked up its stake in the controlling shareholder of Banco de Chile, acquiring an additional 8.52% in LQ Inversiones Financieras for $511 million. Banco de Chile, the Andean nation's second largest bank, is controlled by the local Luksic family, which also controls U.K.-listed copper miner Antofagasta PLC (ANTO.LN) and U.S.-listed beverage company Compania Cervecerias Unidas SA (CCU), among other assets. In a 2007 deal Citigroup Inc. took a 10.44% stake in Banco de Chile, through LQ, and the Chilean bank acquired Citibank's local assets. Under the terms of the Banco de Chile-Citigroup deal, the Chilean bank took over all of Citibank's local clientele, while the U.S. bank retained control of Banco de Chile's operations on U.S. soil.


And where is Citigroup's home country regulator, the Federal Reserve?

January 25, 2010

With Geithner supposedly on the outs, and Bernanke facing more opposition -- though not enough -- in the Senate, it's not a happy time for the Federal Reserve right now.

January 18, 2010

As Obama's Bank Fees Under-Target Citigroup and AIG, Geithner;s Federal Reserve Days Questioned

By Matthew R. Lee

NEW YORK, January 14 -- The night before President Barack Obama was scheduled to unveil a scheme of fees on the three or four dozen largest financial firms, the Administration held a then embargoed conference call with the press.

  Several questions centered around why the auto manufacturers which took TARP funds would not also be fined. Others wondered, if the fee regime yielded more than what the government and taxpayers lost through TARP before it expired in ten years, would the money still be collected and how would it be used?

  The Administration representative, who the press was told could only be called a "senior administration official," replied that once the basis of calculating the fee had been decided on, car companies didn't fit it.

  Before all questions were answered, the Administration signed off, noting that Obama would be making his announcement at 11:20 the next day. Among the questions not taken or answered was this, from Inner City Press: why assess all of the financial firms under the program at the same rate, fifteen basis points?

  Citigroup, for example, received much more TARP and other payouts than other covered banks. And as South Bronx based Fair Finance Watch and others showed at the time, the government tried to help Citigroup scoop up Wachovia, until another less subpsized offer won the day. Why benefit Citigroup again by treating it like other, less subprime heavy banks? The same holds for AIG.

  The "senior Administration official" went out of his way to portray the program as a matter of principle for not only Obama but also "his" Treasury Secretary, Tim Geithner.

  To some, the timing is meant to blunt renewed bipartisan criticism of Geithner, this time only only for not paying his taxes to the IRS -- which would be collecting the fees from the financial firms -- but for having told AIG not to disclose the preferential basis of the bailouts it was receiving, while he was at the Federal Reserve Bank of New York.

  But it was hard to note that his seeming favorite, AIG, and the bank most benefited by his Federal Reserve Bank of New York, Citigroup, are benefited by the structure of this proposed Financial Crisis Responsibility Fee program.

  In fact, some say it has an aspect of a Tim Geithner bail out.

  And that's... a question that should be asked, and answered. Watch this site.

January 11, 2010

So now for his work at the New York Fed, telling AIG to withhold information from the public, Geithner's on the grill. That's all to the good. But it also reflected on the wider Fed...

January 4, 2010

In the run up to the Senate debate on Bernanke, see this on mortgage(s) - click here.

December 28, 2009

While the Federal Reserve has yet to ask Goldman Sachs the questions it should, including as triggered by Inner City Press / Fair Finance Watch's comments on Goldman's application to acquire bank stakes, now the NY Banking Department will have a chance. Will the two coordinate? Watch this site.

December 21, 2009

So Bernanke passed, 16-7, the Senate Banking Committee, with further opposition pending in the full Senate in January.

December 14, 2009

The Federal Reserve has belatedly written to Inner City Press that "You previously submitted a FOIA request for the Goldman Sachs application. Additional information on the organizational chart has become available and is attached." We'll put the chart online here. We'll have more on this.

December 7, 2009

The holds placed in the Senate on President Obama's renomination of Ben Bernanke give more leverage to the move to audit the Federal Reserve.

November 30, 2009

  Ben Bernanke has written that "the Fed played a major part in arresting the crisis, and we should be seeking to preserve, not degrade, the institution's ability to foster financial stability and to promote economic recovery without inflation." But what about the Fed's inattention to predatory lending and its role in TRIGGERING the crisis? The Fed's lack of scrutiny of the predatory lending and service issues raised against Goldman Sachs pending applications does not bode well.

November 23, 2009

The Federal Reserve Bank of New York, it turns out, is getting poorer or can't count. They claimed to have mailed a copy of Goldman Sachs' application to Inner City Press on November 3. But they did not arrive. When they did, it showed $7.30 of postage on November 3 -- then $1.15 extra on November 13, after the envelope had been returned to the Fed...

November 16, 2009

Ah, the arrogance of Goldman Sachs. Nearly a month after ICP Fair Finance Watch filed comments with the Federal Reserve, a response arrived from Goldman. They'd ignored the directions of how to send mail to Inner City Press, and hadn't bother to e-mail. And their response, while claiming that detailed reports of misdeeds, including by subsidiary Litton, by sample target Avenue Bank and in loans bought from Fremont are "replete with egregious mistakes and factual inaccuracies," does not identify a single error. They're just counting on the friendship or subservience of the Fed. Watch this space.

November 9, 2009

Long after Inner City Press filed comments and a FOIA request with the Federal Reserve on Goldman Sachs' application, it has yet to receive any responsive filing by Goldman. A Fed staffer called to say that the requested copy of the application was on its way, but it still has not arrived. Some process.

And under Dodd's proposed bill, what would happen to the Federal Reserve Banks?

November 2, 2009

Bank holding company CIT has declared bankruptcy. So what does being a BHC mean?

October 26, 2009

A week after Inner City Press' Fair Finance Watch filed a formal protest to Goldman Sachs' applications to the Federal Reserve for shares in several bank, and after the Fed has started the clock for Goldman's response, no defense has been offered.

October 19, 2009

Goldman Sachs was allowed to become a bank holding company without any public comment period or consideration of the Community Reinvestment Act, which would otherwise have been required. Since then, as simply one example, Goldman Sachs has been charged with involvement in predatory lending, including for the acts of its subprime servicing subsidiary, Litton Loan Servicing. Even Goldman's settlement left the public in the dark.

October 12, 2009

Hitting a new low, it took the Federal Reserve until September 30, 2009 to respond to Inner City Press / Fair Finance Watch's December 8, 2008 Freedom of Information Act request for the applications to become bank holding companies submitted by GMAC and the CIT Group. That's more than nine months, and even then, the Fed says it is withholding 182 pages. We will be appealing...

October 5, 2009

So one of the few proposed ways that the Fed might help CRA -- by taking on oversight power over large hedge funds, which would allow a related move to assess these funds under CRA -- Bernanke rejected last week in Q&A with Congress. Great...

September 28, 2009

As the legislation to require auditing of the Federal Reserve gather strength and supporters in Congress, the Fed sent its general council to argue that this type of accountability would just lead to higher rates. This sounds like JPMorgan Chase's argument when Georgia passed anti-predatory lending legislation...

September 21, 2009

Last week the Federal Reserve issued a letter saying it will belated begin examining non-bank subsidiaries like CitiFinancial. The Fed says in footnote one they have the legal authority to do these exams. Then why did they refuse to do them for so long? Iit's like the S&L regulator which stood by as the thrifts wasted taxpayer money -- at least its duty were passed along to the OTS.

On merger applications in the past, when community groups like ICP / Fair Finance Watch put in evidence of violations by bank's subsidiaries, the Fed would drop a footnote that the issues were being referred to the FTC and HUD -- implying that the Fed had no jurisdiction over them, certainly no commitment to do anything about them

The Fed says, "Supervisory activities will be planned based on the issues identified ...through the investigation of consumer complaints." So what has the Fed been doing to date with consumer complaints against non-bank BHC subsidiaries?

September 14, 2009

Fed Governor Tarullo on August 25 said, "there is a tendency in most organizations to fall into the habit of consulting with the same groups of actors each time a new issue arises." But look at the Fed's Community Advisory Council...

September 7, 2009

Having tangled repeatedly with the Federal Reserve about Freedom of Information Act compliance, we note Bloomberg LP v. Board of Governors of the Federal Reserve System, U.S. District Court, Southern District of New York (Manhattan), No. 08-9595. Chief District Judge Loretta Preska of the SDNY wrote in a 47-page opinion, "The Board essentially speculates on how a borrower might enter a downward spiral of financial instability if its participation in the Federal Reserve lending programs were to be disclosed. Conjecture, without evidence of imminent harm, simply fails to meet the Board's burden." Preska concluded that the Fed "improperly withheld agency records in response to a FOIA request by conducting an inadequate search." Why are we not surprised?

August 31, 2009

   President Obama's decision, announced from Martha's Vineyard, to re-nominate Ben Bernanke to chair the Federal Reserve represents even to some of Obama's most fervent supporters a sign that, at least on banks and the economy, his "Change We Can Believe In" may be no change at all. That Obama nominated and then stood behind the New York Fed's Tim Geithner, even after the public disclosure that the man he would put in charge of the Internal Revenue Service had himself neglected to pay his taxes, and even when caught only partially paid up, using the statute of limitations, these supporters excuse as a bittersweet decision made early on, when the economy was in crisis. That is no longer the case, according to Team Obama. So to give another term to the very same Fed chairman who presided over the predatory practices of Citigroup et al., and then bailed them and AIG out, can't be defended on crisis grounds. As we've noted, Bernanke's approach to the Community Reinvestment Act is that it needn't be enforced on mergers -- which is the law's only enforcement mechanism. This defanging of CRA is an idea that appears to be spreading. Watch this site.


August 24, 2009

Both Jackson Hole speeches put on the Fed's web site on August 21 cite Walter Bagehot ([1873] 1897), Lombard Street: A Description of the Money Market (New York: Charles Scribner's Sons)....

August 17, 2009

   So now the Fed requests two reports from CIT. A little late, isn't it?

August 10, 2009

A telling omission? Gov. Tarullo's August 4 testimony did not mention the concept or even phrase "consumer" protection....

August 3, 2009

On July 31, Inner City Press asked the Western Hemisphere Division Chief of the International Monetary Fund Charles Kramer about disagreements inside the U.S. Federal Reserve:

Inner City Press: The President at the Philadelphia Federal Reserve said that he thinks that it will distract the Federal Reserve System to regulate hedge funds and other nonbanks that are called system, that it may not be a good idea. Do you have any view on that?

MR. KRAMER: Again, there are a lot of different ways to organize financial supervision and regulation. We agree that there are institutions like hedge funds or like insurance companies that can be systemic, and I would again call to the broad principle that all those system institutions need to be brought under strong supervision and regulation again just to contain the systemic risks that we can emanate from those types of institutions.

July 20, 2009

  After the financial meltdown exposed the Federal Reserve's inattention to predatory lending and credit default swaps, one would expect the Fed to hold off further loosening the rules on CDS. But you'd be wrong. Last week the Fed granted an exemption to CDS dealer ICE Trust, owned by crisis loser Citigroup and predatory Goldman Sachs, among others, giving them an easier 20 percent capital treatment rather than the 100 percent applicable to uninsured banks like ICE Trust.

   Bloomberg News, notably, spun the story the other way, claiming that "the Federal Reserve determined that ICE Trust is as risky as any insured bank, according to a letter posted July 14 on the regulator’s Web site. The Fed is requiring that bank members of ICE Trust, such as Goldman Sachs and New York-based Citigroup Inc., set aside the same amount of capital as parties trading as federally-backed lenders."
 
  But this is a story yet again of the Fed making it easy for the dealer community-- the dealers sought 0% so at least the Fed is imposing 20%. Those who don't learn from the past are condemned to repeat it...

July 13, 2009

Last week Tim Geithner ham handedly telegraphed the re-appointment of Ben Bernanke at the Fed -- on a show whose poll had nearly all respondents saying that Geithner himself should go...

July 6, 2009

From the WSJ's account of Geithner's domination of the process to name his successor at the New York Fed, "The search to replace Mr. Geithner began immediately after he was tapped in late November to be Treasury secretary...By early January, the list was narrowed to six, including Kevin Warsh, a member of the Federal Reserve Board in Washington; Rodgin Cohen, who specialized in banking law at Sullivan & Cromwell LLC; and Mr. Dudley, who had been head of the New York Fed's markets division since 2007" -- and was at Goldman Sachs before that. Dudley was Geithner's choice. JPM Chase's Jaime Dimon, on the other hand, favored his lawyer Rodgin Cohen.

June 29, 2009

The June 25 hearings on Capitol Hill about the Federal Reserve's role in Bank of America's acquisition of Merrill Lynch don't auger well for Barack Obama to renominate Ben Bernanke as Fed chairman. Bernanke repeatedly said, I don't recollect that conversation. He was asked about statements by top Fed lawyer Scott Alvarez but dodged the repeated question, doesn't he work for you? He took at least some fire from the left as well as right. Even more shameful was the Fed giving away the store to GMAC, and now to PIMCO. Is this the change to be believed in?

The hearings also recounted how little confidence a Fed government had in Bank of America CFO Joe Price, who'd go on to throw the Community Reinvestment Act under the bus during the bank's April earnings call. His statements have yet to be unpacked. But Ken Lewis, and perhaps Bernanke himself, might want to start packing.

June 22, 2009 -- Obama's Proposal By Splitting Community Reinvestment Act from Mergers Could Cut Enforcement, Lost in (Fed) Sauce

Byline: Matthew R. Lee of Inner City Press: News Analysis

MILWAUKEE, June 17 -- The Obama administration's financial regulation proposal, on the issue of the Community Reinvestment Act, bears the fingerprints of the Federal Reserve, not only Tim Geithner but also Ben Bernanke. While quickly praised by, for example, Paul Krugman, since the proposal shifts CRA evaluation away from the regulators who review the mergers on which CRA is actually enforced, bankers will like it, and may be behind it.

   CRA is only enforced in connection with banks' applications for regulatory approval for mergers and expansions, as confirmed by the Department of Justice Office of Legal Counsel. Without taking this into account, the Obama administration is proposing that CRA be a core function of the Consumer Financial Protection Agency, which will not be responsible for merger review.

   Had this proposal been made under the Bush administration, CRA advocates would have howled that it weakened the CRA. Since it's Obama, the response appears generally to be, let's wait and see.

   But not only did Obama appoint and fight for Tim Geithner, who at the Federal Reserve Bank of New York oversaw some of the most predatory moves by Citigroup and others -- Obama also continues to praise Ben Bernanke.
 
  In late 2008 at the Federal Reserve in Washington, Inner City Press asked Ben Bernanke about his decision to waive any CRA public comment period when he allowed Goldman Sachs and Morgan Stanley to become bank holding companies.

Bernanke responded that it makes no sense to limit CRA review to regulatory approval time -- despite that being the only legal enforcement of CRA. Now that thinking seems to have insidiously spread within the Obama administration.

  But who will blow the whistle? Krugman for example takes the proposal as a "poke in the eye to right-wingers." To skeptics, it's a perfect post modern move: cheered by ideological but ill-informed liberals, but actually serving big business.

Postscript -- proponents of Obama's plan have noted that the CFSA would, among other things, hold public hearings on (some?) mergers. But if the power to approval or deny the mergers remains with the Federal Reserve, OCC and FDIC, the CFSA could be just a side show. The Bank Holding Company Act and Bank Merger Act would have to be amended -- first.
 
  On the other hand, a portion of Obama's proposal, to declare hedge funds which pose systemic risk to be bank holding companies, could easily be expanded to put just funds under the CRA. Whether this happens, or for now is at least quickly proposed, may be a litmus test. Watch this site.

June 15, 2009

So while supposedly recused at the Federal Reserve Bank of New York, Tim Geithner was weighing in on Bank of America, in support of the shotgun marriage with Merrill Lynch, it emerged in Congress last week. He denies it. But didn't he initially denied not paying his taxes?

June 8, 2009

Bank of America will be saved by... ex-regulators? Now on the board of directors are former Federal Deposit Insurance Corp. Chairman Donald Powell and former Federal Reserve Governor Susan Bies, routine denier of FOIA appeals while on the Board. That is to say, regulators who failed to stop predatory lending and the meltdown now benefit from it....

June 1, 2009

What a surprise: the Committee on Capital Markets Regulation, including vulture investor Wilbur L. Ross Jr. of WL Ross & Co., is proposing that the Federal Reserve become the super-regulator....

May 25, 2009

So how did the Federal Reserve explain the lack of public notice on its H2A web site for Bank of America's application for a new bank? We don't know yet: we asked the Fed to response by email, but they have not.

May 18, 2009

On May 14, Inner City Press submitted the following to the Federal Reserve:

         On behalf of Inner City Press/Community on the Move and its members and affiliates, and the Fair Finance Watch (collectively, "ICP"), this is a
petition, challenge and request under the Freedom of Information Act (5 U.S.C. § 552; "FOIA") and Community Reinvestment Act (CRA) regarding the
application by Bank of America to acquire 100 percent of the voting shares and thereby indirectly acquire Bank of America North Carolina, National
Association, and for the Federal Reserve System's (the "FRS's") communications with Bank of America in 2009 and a demand for public notice and comment, and a protest-in-advance.

  The FRS has virtually repealed banking laws, including the BHC Act and the CRA, by approving mergers and conversion with no public notice or comment.
Now, on an application by the largest and most troubled US bank, the Fed provided no notice until the last day on its H2A web site.  Yesterday, ICP
was asked about a notice seen in the Federal Register. It was not in the H2A. The undersigned called the FRB of Richmond, and noted that it was not in the H2A, requested an extension of the comment period.

  Today May 14, suddenly the proposal is in the updated H2A,http://www.federalreserve.gov/releases/h2a/h2a.cfm?view=week with the comment period ending... tomorrow. This is unreasonable, and unwise given the issues surrounding Bank of America. It is widely reported that B of A would have been required to raise more capital, but that it lobbied the Fed to knock $16 billion off what it should raise. The Fed and its governors, and B of A until recently when its CEO was under fire, have said that CRA did not cause the financial crisis. But on B of A's April 20 earnings conference call by Lewis and his Chief Financial Officer
Joe Price told analysts that the company's "Community Reinvestment Act portfolio is seven percent of the residential book, but 24% of the losses."
Yeah -- blame your bad decisions to invest in high falutin asset-backed securities on the CRA... We'll have more on this.The conference call is archived here
http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-eventDetails&EventId=2134324and CFO Price makes his statement at Minute 26:25
  ICP is requesting an evidentiary hearing to explore this public claim by B of A.

In its (and the) first study of the just-released 2008 mortgage lending data, Inner City Press / Fair Finance Watch has found that Bank of America
NA confined Latinos to higher-cost loans above the rate spread 1.51 times more frequently than whites. Countrywide Bank, which B of A acquired, had a lower disparity, at 1.22. Bank of America NA denied applications by African Americans 1.44 times more frequently than whites, while denying Latinos fully 1.57 times more frequently than whites.

ICP Fair Finance Watch was interviewed on November 7 about the use of funds by Bank of America --

"Bank of America Corp., largely through its political action committees, gave candidates and parties $3.7 million this election cycle, according to
an analysis of Federal Election Commission reports. Bank of America spent $6.5 million lobbying federal officials over the same period; Wachovia spent $2.7 million and Wells Fargo, $3.6 million."

  There is no commitment that the bailout funds will not be put to these uses...

There is more to be said, but first the comment period must be extended.

May 11, 2009

So the Fed even cooked the books on the stress tests, after Wells Fargo threatened to sue. At least $16 billion was knocked off what Bank of America has to raise. Way to regulate... Same to the Fed's use of a Goldman Sachs director, Stephen Friedman, as the president of the New York Fed. No conflict of interest there, right?

May 4, 2009

The Federal Reserve Bank of San Francisco has added to its Economic Advisory Council a vulture investor and previous M&A lawyer, Jonathan Coslet. So this is where the Fed gets it advice from...

April 27, 2009

The Federal Reserve took on more than $74 billion in subprime mortgages, depreciating commercial leases and other assets after Bear Stearns Cos. and American International Group Inc. collapsed. In its biggest disclosure of the securities accepted to stabilize capital markets, the Fed said yesterday it had unrealized losses of $9.6 billion on the assets as of Dec. 31. The bonds, swaps and notes were taken in from Bear Stearns, once the fifth-biggest Wall Street firm by capitalization, and AIG, which had been the world’s largest insurer. The losses on securities backed by assets such as home loans in Florida and California signal that U.S. taxpayers may be forced to reimburse the central bank through the Troubled Asset Relief Program...

April 20, 2009

Notably, thus far in 2009 the Federal Reserve's web site lists no notice and comment orders under the Bank Merger Act, one each under Sections 3 and 4 of the Bank Holding Company Act, and none under both. There's been a slow down -- that's an understatement -- and also, more things done without notice or comment...

April 13, 2009

  Following up on ICP / Fair Finance Watch's first study of 2008 HMDA data, a complaint has been filed with the Federal Reserve:

Re: Need for FRB Action on Mockery Made of HMDA, by Regions and others

Dear Ms. Johnson, Mr. Alvarez and others:

   This letter concerns attempts to avoid public review of Home Mortgage Disclosure Act information by Regions Financial and, prospectively, other financial institutions. As you know, under 12 CFR § 203.5, institutions are required to provide their HMDA Loan Application Registers to requesters. Virtually all banks provide the HMDA LAR in .dat or other analyable electronic format. In fact, searching the Federal Reserve Bulletin we find notation of only two institutions refusing to provide their data in useful form: AmSouth (now Regions Financial) and New York Community Bank. (Lehman Brothers and AIG also took this approach; significantly, the former went bankrupt and the latter survives only as a ward of the FRB.)

   Now, Regions has continued what was AmSouth's stance as a HMDA outlier, by responding to a request for its HMDA LAR in .dat format by providing the data in a PDF file of over one thousand pages, which cannot be analyzed using SPSS or other statistical program. The effect is to make Region's 2008 lending performance unanalyzable until September, unlike nearly all other large banks...

    Beyond instructing Regions, NYCB and others to move into the mainstream of HMDA reporting to the public, the FRB is encourages to revises its outmoded staff commentary on 12 CFR Part 203, Section 203.5 (which as is relevant here already encourages "mak[ing] the modified register available in census tract order... in order to enhance its utility to users."  It is imperative that the Federal Reserve, given its responsibilities under HMDA, make clear to Regions and other institutions that the HMDA LARs they are required to provide to the public should be provided in analyzable electronic format to enhance its utility, particularly following the financial meltdown and the lack of oversight it has highlighted. We await your response.

April 6, 2009

Subprime Survivors Wells, BofA and JPM Chase Were More Disparate By Race in 2008 than Wachovia or Countrywide, Trends Will Worsen Under Current Regulators

NEW YORK, April 2 -- In the first study of the just-released 2008 mortgage lending data, Inner City Press / Fair Finance Watch has found that the seeming survivors of the banking meltdown, Wells Fargo, Bank of America and JPMorgan Chase, had worse disparities by race and ethnicity in denials and higher-cost lending than the banks they acquired, Wachovia and Countrywide. Mortgage lending in the U.S. will become more and not less disparate because of the emergency mergers and bailouts engineered by the regulators, the study predicts.

   Fair Finance Watch notes that JPMorgan Chase's massive closing of branches of Washington Mutual will also make credit harder to come by, especially in poor neighborhoods.  2008 is the fifth year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of 3 percent over the yield on Treasury securities of comparable duration on first lien loans, 5 percent on subordinate liens.

            Wells Fargo Bank in 2008 confined African Americans to higher-cost loans above this rate spread 2.18 times more frequently than whites, according to Fair Finance Watch. Wachovia Mortgage FSB, the largest lender of Wachovia which Wells Fargo acquired, had a lower disparity, at 1.46.

            Bank of America NA in 2008 confined Latinos to higher-cost loans above the rate spread 1.51 times more frequently than whites, the data show. Countrywide Bank, which B of A acquired, had a lower disparity, at 1.22.

            JPMorgan Chase was even more disparate to Latinos, confined them to higher-cost loans 2.10 times more frequently than whites, almost as pronounced as its disparity between African-Americans and whites, 2.26. Citigroup, perhaps due to its shrinking, some say dying, business had disparities of 1.90 for African Americans and 1.23 for Latinos. For US Bancorp, the disparity for African Americans was 1.55 and for Latinos, 1.35.

            "The banks the regulators favored in 2008, allowing emergency takeovers like JPMorgan Chase's of Washington Mutual, Bank of America's of Countrywide and Merrill Lynch, and Wells Fargo's of Wachovia, were the most racial disparate lenders," states the Fair Finance Watch report. "The regulators did not put any conditions on the mergers or Troubled Assets Relief Program bailouts, for example allowing Chase to close dozens of Washington Mutual branches. As things are going, it will be worse and more disparate in 2009. The new administration has yet to make any substantive change to this."

            Several lenders had worse denial rate disparities in 2008 between Latinos and whites then between African American and whites, a change from previous years. Bank of America NA, for example, denied applications by African Americans 1.44 times more frequently than whites, while denying Latinos fully 1.57 times more frequently than whites. Atlanta-based SunTrust in 2008 denied applications by African Americans 1.37 times more frequently than whites, while denying Latinos fully 1.78 times more frequently than whites.

  The law required that the 2008 data be provided by April 1, following March 1 requests by Fair Finance Watch. Some lenders did not provide their data by the deadline. Regions Financial provided its data at the deadline but only in paper format, on over 2000 pages, so that it could not yet be computer-analyzed. Further studies will follow.

March 30, 2009

Geithner Promotes Megabanks' Monopoly, in DC as at Fed, 17 Cut to 7 on Derivatives

Byline: Matthew R. Lee of Inner City Press on Wall Street: News Analysis

NEW YORK, March 28 -- Seven megabanks' renewed grab for monopoly power in the over the counter derivatives market shows how little Wall Street's real power has changed in the transition from the Bush to Obama administrations.

  The banks, including Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse and Deutsche Bank, are paying over $1 million to p.r. firm Prism Public Affairs to "educate" the voters weary of bonus and bailouts that those who caused the crisis should benefit from it.

  Already, Congress members hungry for campaign contribution have submitted to closed door briefings by Ed Rosen of the law firm Cleary Gottlieb, who drafted the legislative language for monopoly.

  The connector in this story is Timothy Geithner, under Bush the president of the Federal Reserve Bank of New York and now Obama's Treasury Secretary. Geithner in June 2008 convened closed door meetings with 17 banks, essentially allowing them to propose and draft their own rules for the derivatives market.

    This led to advocacy by the Fair Finance Watch that Geithner's meetings were in fact rule making that excluded the public in violation of the Administrative Procedure Act, and by Inner City Press, as media, to get the meetings opened to journalists and the public.

  The Administrative Procedures Act (5 U.S.C. Section 553) and related laws require that when the government engaged in rule-making, it must provide notice to the public, and allow and weigh public comments.  The New York Fed under Geithner tried to rule-make without any involvement by the public, even the public most impacted by the subprime lending that underlies these processes. The New York Fed on June 9, 2008 met with a group of the largest banks to discuss, according to the Geithner himself

"Regulatory policy. These are the incentives and constraints designed to affect the level and concentration of risk-taking across the financial system. You can think of these as a financial analog to imposing speed limits and requiring air bags and antilock brakes in cars, or establishing building codes in earthquake zones. Regulatory structure. This is about who is responsible for setting and enforcing those rules. Crisis management. This is about when and how we intervene and about the expectations we create for official intervention in crises."

     Press accounts made clear that the financial instruments and regulatory issues discussed behind closed doors are related to issues of public interest, which in fact are disproportionately impacting low- and moderate- income people and communities of color -- subprime and predatory mortgages.

The financial institutions invited, in mid 2008, were:

Bank of America, N.A. - Barclays Capital - BNP Paribas - Citigroup - Credit Suisse - Deutsche Bank AG - Dresdner Kleinwort - Goldman, Sachs & Co. - HSBC Group - JPMorgan Chase - Lehman Brothers - Merrill Lynch & Co. - Morgan Stanley - The Royal Bank of Scotland Group - Societe Generale - UBS AG - Wachovia Bank, N.A.
Buy-Side Firms: AllianceBernstein - BlueMountain Capital Management LLC - Citadel Investment Group, L.L.C.

  Fast forward to March 2009, with Geithner despite tax evasion installed as Obama's Secretary of the Treasury, and with Lehman having failed and Wachovia been swallowed by Wells Fargo. Now he is promoting monopoly powers in the market for an even smaller group of banks, just seven: Citigroup, JPMorgan Chase, Goldman Sachs, Morgan Stanley, Barclays, Credit Suisse and Deutsche Bank -- which despite European headquarters received billions of dollars in U.S. Troubled Assets Relief Program bailout funds through AIG.

  Now the idea is to formalize the monopoly through legislation, not rule making. Industry friendly Congress people like Connecticut's Chris Dodd are supporting the monopoly for the privileged. The fig leaf policy argument is that derivatives should runs through regulated banks. The push is made now, before it is formalized that non-banks, too, are regulated.  It is a pure power grab, with Timothy Geithner as the connector. And who is fighting this monopoly of the morally if not financially bankrupt? To be continued.

March 23, 2009

Hate to see "we told you so," but... Inner City Press / Fair Finance Watch was on the record that AIG was among the sleaziest of companies all the way back to the 1990s. When Inner City Press filed comments against AIG's acquisition of American General Insurance, AIG responded with threats. AIG hired Ernest Patrikis, the top lawyer of the Federal Reserve Bank of New York, and got its way from Timothy Geithner when he ran the New York Fed.

March 16, 2009

In DC, Officials Defend Bailouts of Citigroup and AIG -- Federal Reserve Still Refuses to Say Whom It Paid

Byline: Matthew Russell Lee of Inner City Press: News Analysis

WASHINGTON, March 13 -- The ongoing bailout of insurer AIG and its counterparties was apologized for but defended by a range of Obama administration officials this week. Treasury Secretary Timothy Geithner, until recently the president of the Federal Reserve Bank of New York and before that at the IMF, said he hated to have to bailout AIG, but "it's systemic."

   His advisor Gene Sperling, a member of President Bill Clinton's economic team, said the Obama administration took office only to find AIG too big to fail, implying that this was entirely attributable to the two terms of George W. Bush. But AIG was allowed to grow without control under Bill Clinton, just as Citigroup was increasingly unsupervised under the tenure at the New York Fed of Timothy Geithner, as CitiFinancial got deeper into predatory lending (click here for Inner City Press reports on that.)

  Friday in the White House Barack Obama met and then faced the Press with Paul Volcker, chairman of the Federal Reserve in the time before Bill Clinton. Volcker rarely used his regulatory powers, at least not to protect consumers from predatory lending. And yet now these are the people, along with Clinton's Treasury Secretary Larry Summers, who are defending massive transfers to Citigroup and AIG, all the while laying blame everywhere except upon themselves.

   Meanwhile, the Fed still refuses to say whom it paid on behalf of AIG, with Geither on March 12 saying Bernanke is still deciding.  Bad instincts...

March 9, 2009

  Congress during the debate about bailing out the banks decided that non-US banks should not be getting TARP funds. Now it emerges that of the $50 billion the Feds have given to AIG's counter-parties, Deutsche Bank for example has gotten a full $6 billion. Also receiving hand-outs were HSBC, Royal Bank of Scotland and Societe Generale. Worse, the Federal Reserve is trying to avoid providing a listing of the companies who've gotten the public money, as reiterated by Fed Vice Chair Don Kohn on March 5. This is a new low, to be followed up in DC this week.

March 2, 2009

  Rare candor: Fed government Elizabeth Duke last week said, " As a former president of the American Bankers Association, I advocated reductions in the regulatory burden." AdvocateD?

February 23, 2009

  In the flurry of non-banking companies rushing to become financial services holding companies or savings and loan holding companies in order to get bailout funds, Inner City Press has put in a number of Freedom of Information Act requests, in response to which some very basic information has been withheld. The example for this week is even the "Financial Holding Company Declaration" submitted to the Federal Reserve for the CIT Group by its outside law firm, Wachtell Lipton. The Fed followed the requests that information be withheld from the public, even as public bailout funds were being sought and doled out.

Citigroup's Pandit last week said, "The future of Citi is in emerging markets, is in Latin America, and is in Mexico with Banamex." While the last is dubious, one thing seems true: the future of Citigroup, if it has one, is not in the United States, although it might be WITH the United States (government)... Even ex-Fed Alan Greenspan is talking about nationalization...

On related FOIA shenanigans, see 53 N.Y.L. Sch. L. Rev. 299, Critical Mass: Restricting Advocates' Rights Under the Community Reinvestment Act, Inner City Press v. Board of Governors of the Federal Reserve System, 463 F.3d 239 (2d Cir. 2006). New York Law School Law Review, 2008 / 2009

February 16, 2009

  Before Congress last week, JPMorgan Chase's Jaime Dimon complained, “we have a Byzantine alphabet soup of regulators,” and that banks and lenders have to deal with the OTC, the CFTC, the SEC and so on. He pontificated that it should be a U.S. system and globally regulated, and that no one should try to create a new regulator. He suggested the Federal Reserve -- and why not, since the Fed delivered Bear Stearns to him and Chase, which then got WaMu as well... The Fed's been good to Morgan Chase.

February 9, 2009

After Bailout, ING's Kok Blames Regulators, including Federal Reserve, for pumping up subprime, food inflation

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, February 4 -- Wim Kok, the chairman of the audit committee of Dutch bank ING, which received a $14 billion bailout, Wednesday at the UN blamed "the institutions entrusted with regulating" for not having "prevented financial speculation." While Kok's criticism of the Federal Reserve -- he cited Alan Greenspan's belated admission to Congress -- was deserved, Inner City Press asked Kok how to allocate blame for the crisis between the regulators and the banks and their directors. Did the regulators make ING buy, and Kok to presumably oversee the buying of, subprime mortgage and other derivative securities? Video here, from Minute 19.

  Kok acknowledged that he saw the crisis and bailouts "like all of us," but also "from a special position," then blamed not only the U.S. regulators but also the "climate" and the "bonus and compensation culture." Video here, from Minute 20:02.

   But what was Kok's own compensation? Kok said that "in all fairness, it is too early to give an accounting of how it happened." But why then did the UN, and its Commission on Social Development, present Kok as the one to read out the blame-the-regulators speech?  Yes, Kok served as Dutch prime minister. But a director of a bank receiving a multi-billion dollar bailout should not be surprised to be questioned about it.

  "In all fairness," to use Kok's own phrase, Inner City Press asked him about the role of financial speculation in driving up food prices in part of 2008. Kok replied that while prices have declined, they could rise again due to inflation caused by, yes, the bailouts. As to how speculation could be stopped by the UN system, he did not answer. Whether ING itself speculates in food or agribusiness stocks, as with Kok's compensation, is not known at deadline.

February 2, 2009

Banker Allison of BB&T in Meltdown Misdirection, Subprime Loans Were Shielded from CRA by Federal Reserve

Byline: Matthew R. Lee of Inner City Press on Wall Street: News Analysis

SOUTH BRONX, February 1 -- Given the hundreds of billions of dollars being thrown at banks in response to the subprime lending-triggered meltdown, holding accountable those who turned American finance down the subprime path would seem to be important. Conservatives blame the Community Reinvestment Act, saying that this law enacted in 1977 to combat the redlining of and refusal to lend in inner city areas was something of a time bomb, set to explode 30 years later.

    But the explosive growth of subprime lending took place in parts of financial holding companies which are not covered by CRA, like Citigroup's CitiFinancial and similar consumer finance subsidiary in Wells Fargo and HSBC, purchased as Household International. The subprime loans were securitized by investment banks not only like the defunct or swallowed Lehman Brothers, Bear Stearns and Merrill Lynch, but also Goldman Sachs and Morgan Stanley, entirely outside of CRA, before they ran to the Federal Reserve to get their bailout money.

  One tier down the world of finance, the chairman of regional bank BB&T John Allison gave a speech on January 29 in which he blamed the CRA for the financial crisis. This is more than a little ironic, given BB&T's engagement under Allison in subprime lending.  When the Bronx-based Fair Finance Watch documented to the Federal Reserve that BB&T's banks referred turned-down loan applicants to their high-cost subprime affiliate Lendmark Financial Services, during the public comment period on BB&T's application for approval to acquire Georgia's Main Street Banks, the Federal Reserve ignored the issues.

  Click here for the Federal Reserve approval order, which recited from the comments of Fair Finance Watch

  "concern about referrals of loan applicants to Lendmark Financial Services ('LFS'), a nonbank subsidiary of BB&T that makes subprime loans. BB&T has represented that it might refer to LFS applications denied by a BB&T subsidiary bank that do not meet the bank's underwriting guidelines. Before making a referral, however, these applications undergo an internal second-review procedure. In addition, BB&T notes that LFS has a policy to refer applicants who meet the Freddie Mac underwriting guidelines to BB&T's subsidiary banks."

   But as Inner City Press noted, BB&T's referrals up and down do not use the same standard. On fringe finance the Federal Reserve said that Fair Finance Watch

"expressed concern about BB&T's relationships with unaffiliated pawn shops and other nontraditional providers of financial services. As a general matter, the activities of the consumer finance businesses identified by the commenter are permissible, and the businesses are licensed by the states where they operate. BB&T has stated that it does not focus on marketing credit services to such nontraditional providers and that it makes loans to those firms under the same terms, circumstances, and due diligence procedures applicable to BB&T's other small business borrowers."

   BB&T admitted in its responses into the record before the Federal Reserve relationships with 45 payday and other fringe financiers. BB&T under Allison ran headlong into subprime -- as Fair Finance Watch and then the Fed noted, in its order

"A commenter asserted that the Board should, in the context of the current proposal, review BB&T's recently announced plans to acquire the assets of FSB Financial Ltd. ('FSB'), Arlington, Texas, a nonbanking company that purchases automobile-loan portfolios. The FSB acquisition is not  related to the current proposal. Moreover, if the FSB acquisition is consummated under authority of section 4(k) of the BHC Act, the acquisition would not  require prior approval of the Federal Reserve System. BB&T would require prior Federal Reserve System approval if the acquisition were proposed under sections 4(c)(8) and 4(j) of the BHC Act, and the transaction would be reviewed in light of the requirements and standards discussed above."

  The Gramm-Leach-Bliley Act of 1999 amended the Bank Holding Company Act of 1956 and made it easier for subprime lenders to be acquired with no prior review by the Federal Reserve, no public comment period, no CRA review. BB&T John Allison's fulimations notwithstanding, that deregulatory GLB Act, passed in part to legalize after the fact the merger that created Citigroup, is the statute investigators should be looking at. And the acts of subprime-hungry bankers like John Allison of BB&T. We'll have more on this meltdown misdirection, in the spirit of accountability.

  For now, consider this buzz about Lendmark in 1997, this 2006 BB&T investor relations presentation (also of its subprime Liberty Mortgage Corporation), and again, Lendmark's own website, still reciting "non-conforming mortgage loans" from "104 branch locations throughout Georgia, Tennessee, Virginia, Maryland, Florida, North Carolina, South Carolina, Kentucky, West Virginia, and Delaware."

January 26, 2009

As JPMorgan Chase Shutters WaMu Branches, Regulators Missing, Commitments Gone

Byline: Matthew R. Lee of Inner City Press on Wall Street: News Analysis

NEW YORK, January 23 -- JPMorgan Chase is moving to closed down dozens of the Washington Mutual bank branches the government allowed it to acquire last year with no public notice or comment period. In Dallas, Chase has targeted 23 WaMu branches for closure, and another six in Fort Worth. In the Chicago area, Chase says it will shutter 57 WaMu locations. More branch closings will follow across the nation.

  Community and consumers groups are belated protesting the acquisition, which was a one of a slew of so-called emergency transactions on which no Community Reinvestment Act comments were considered, including the accession of Goldman Sachs and Morgan Stanley to bank holding company status, and Bank of America's now discredited acquisition of Merrill Lynch.

   JPMorgan Chase benefited from regulator-protected acquisitions not only of WaMu but, before that, of Bear Stearns. As first reported by Inner City Press, Bronx-based Fair Finance Watch submitted to the Federal Reserve Board comments on these transactions, but was told that emergency did not allow consideration of the issues raised, including prospective branches closings.

  JPMorgan Chase has now told groups who have asked if it will continue Washington Mutual's CRA programs and commitments that since there is no more Washington Mutual, there is no more commitment.

 This comes in the wake of JPMorgan Chase's Jaime Dimon reversing himself from a stated commitment to mortgages through brokers to abruptly shutting down Chase's wholesale mortgage unit. While groups are told this will give Chase more control over the terms of loans, brokers point out that Chase ultimately had control in the wholesale business, too.  Commitments are made to be broken, apparently, particularly those by companies the federal regulators bailed out or merged out of existence. What, the question grows, is Timothy Geithner's position on this Main Street issue?

Update: later on January 23, community groups were told that JPMorgan Chase plans to close over 40 WaMu branches in New York State...

January 19, 2009

    So the Fed puts in charge of AIG Chester Feldberg, former chairman of Barclays Americas, and Douglas Foshee, owner of El Paso Corp. Can you say, conflict of interest?

  And the Fed's purported advisor on community issued, fresh from CCC, is not allow to talk to the press -- and he accepts it?  Geithner-gate is in this week's CRA Report...

January 12, 2009

  A new low -- as of 10:20 p.m. on Sunday, January 11, 2009, the Federal Reserve Board's web site  http://www.federalreserve.gov was down, "This link appears broken. DNS error - cannot find server."

January 5, 2009

  To show how unserious the Fed was about banks' transparency, before before the Fall, we note that while New York Community Bancorp was one of the institutions which insisted on providing Fair Finance Watch with its Home Mortgage Disclosure Act data only in paper or PDF form, so that it couldn't be analyzed, the Fed has on its Thrift Institution Advisory Council the CEO of NYCB, Joseph Ficalora. Talk about impunity...

December 29, 2008

  So let's get this straight -- the Fed didn't provide any formal public notice or comment period on CIT's application to become a bank holding company, but because Inner City Press wrote in for a copy of the application and initially requesting a hearing, the Fed's approval order was mailed to Inner City Press, with a paragraph denying the hearing and making it appear that there was a fair process. But there was not.... The same applies to GMAC. The Fed has become lawless.

December 22, 2008

 The Fed's PNC - National City approval order is contemptuous of the public, including the local member of Congress. Why favor PNC over NatCity? It's not explained. And the Fed is trying to deny FOIA requests for basic information about who they lend to. Perhaps there needs to be a HMDA law for the Fed...

  Who knew? Morgan Stanley, which the Federal Reserve let become a bank holding company with no public comment, now applies on an expedited basis for its Greenwich, Connecticut-based subsidiary Frontpoint to own a stake in a start-up bank that says it will serve Manhattan, Brooklyn and parts of Long Island: Heritage Bank. Then, there is a China-related application by Morgan Stanley, on which the comment period is still open. Expect more on this.

December 15, 2008

Swept Under the TARP by the Federal Reserve, Grabs by GMAC, PHH and CIT, Wachovia's Sewers

Byline: Matthew R. Lee of Inner City Press on Wall Street: News Analysis

NEW YORK, December 8 -- After most big banks and even many non-banks have already drawn down their bailout funds from the government's Troubled Assets Relief Program, there's belated interest in Congress in what banks have been doing. Monday afternoon on the Senate floor, Byron Dorgon of North Dakota expressed shock at Wachovia's purchase and lease-back of German sewer system, just so it could use the depreciation of the German pipes to avoid its U.S. taxes. 

  Now that Wachovia is being bought -- by Wells Fargo and not as Washington wanted Citigroup -- is it easy  to finally criticize it and its outgoing management. But how about Citigroup and its entrenched officials Robert Rubin andVikram Pandit, who right after its second bailout serving spent eight billion Euros buying the highway business of Spanish construction firm Sacyr Vallehermoso?

  The TARP program is full of abuses. Focus only on some pending ones, the conglomerate PHH says it is applying for TARP funds, without owning any bank or thrift. Its application is not even on the Office of Thrift Supervision's website. Nor, on the Federal Reserve's website, can any notice be found for the applications of GMAC and CIT.  The Fed has sent Inner City Press a copy of GMAC's -- but why is the required public notice  not on the Fed's web site?

December 8, 2008

  Fair Finance Watch has put in comments requesting public hearings on PNC's application to buy National City, in a deal the regulators cooked up and now must be the judge of. National City asked for TARP funds but was denied. PNC was given the funds, to buy National City; the regulators will then buy the troubled assets from PNC. It's called unexplained favoritism: save Citigroup and AIG but let Lehman Brother go under. Turn down National City, then buy its bad loans from PNC. Maybe Tim Geithner will explain.

Meanwhile the subprime bottom-feeder Ocwen is trying to line up for the Troubled Asset Relief Program bail-out funds. Ocwen has applied to buy Kent County State Bank in Jayton, Texas.  More on this anon.

December 1, 2008

  Let's compare two holding company regulators. "The Office of Thrift Supervision, which regulates savings and loans, has levied 34 cease-and-desist orders this year, with 23 coming since June. The Federal Reserve issued two such orders this month after issuing only one in the year through October." The Fed -- some tough regulator... To bend over backwards to be fair, if it is the Fed's strategy to regulate without public cease and desist orders, the Fed has to stop being so resistant to providing documents under the Freedom of Information Act. Bernanke knows best? Where's the evidence of that?

November 24, 2008

  The choice of Tim Geithner as Treasury Secretary put a protege of Citigroup's Robert Rubin in charge of the economy, just as Citigroup teeters near failure due to its predatory lending. Rubin did nothing to stop Citi's gouging practices, just as Geithner did little as head of the Federal Reserve Bank of New York to regulate and reign in the lenders under his jurisdiction. How, some are asking, is this is change one can believe in?

November 17, 2008

  Under the headline, "Economists offer support for Bernanke," this weekend's Wall Street Journal Europe quotes without qualification JPMorgan Chase economist Bruce Kasman that "Bernanke has done a good job." No mention that Bernanke gave Bear Stearns l and then Washington Mutual to JPM Chase, with no public comment period. Sure, if you were JPMC or Jaime Dimon, you'd lavish praise on Bernanke for these moves. But others?

November 10, 2008

   AP breathlessly reported that "the Federal Reserve says banks and investment firms borrowed from its emergency lending program over the past week at a slightly slower -- but still brisk -- pace. The Fed's report shows commercial banks averaged nearly $110 billion in daily borrowing over the past week.  For the week ending Wednesday, investment firms drew $77 billion. This category was recently broadened to include any loans that were made to the U.S. and London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley and Merrill Lynch."

  So the Fed by allowing all three in the world of bank holding companies, in all three cases with no public comment period at all, has creates business for itself...

November 3, 2008

At UN, Stiglitz Slams Chase For Misuse of Bailout, Federal Reserve for Predatory Lending

Byline: Matthew Russell Lee of Inner City Press at the UN: News Analysis

UNITED NATIONS, October 30 -- The $700 billion bank bailout should not be used for mergers to increase market share, economist Joseph Stiglitz told the Press on Thursday. Following a UN panel discussion about the global financial crisis, Inner City Press asked Stiglitz about predatory lending and, as an aside, if he would consider the post of Secretary of the Treasury. While not directly answering the latter, Stiglitz said that the current Secretary, Henry Paulson, is ignoring the Congressional intent of the bailout and is allowing the funds to be misused by the banks.

  Stiglitz specifically cited a conference call by JPMorgan Chase, in which an executive bragged that the $25 billion it is claiming from the bailout will make Chase "more active on the acquisition side or opportunistic side for some banks who are still struggling. And I would not assume that we are done on the acquisition side just because of the Washington Mutual and Bear Stearns mergers. I think there are going to be some great opportunities for us to grow in this environment." Stiglitz called that an abuse, and also took a jab at the Federal Reserve, which he said had the power to crack down on predatory lending since 1994 but did not. Video here, from Minute 19:31.

October 27, 2008

From Dow Jones on the Fed's self-approval of Wells Fargo - Wachovia: " The Fed said a commenter had requested a public meeting, but the Bank Holding Company Act does not require the board to grant that request. A Federal Reserve spokeswoman wouldn't disclose the name of the group that had requested the hearing." So now, like North Korea, the Fed tries to cover up even who has commented. For the record, ICP Fair Finance Watch made the request...

  So GE has signed up for the Fed's commercial paper program. It's evasions of the CRA, or limitations to a single credit card bank and Utah industrial loan company, should end... Better late than never, we suppose, for Alan Greenspan to apologize for ignoring evidence of predatory lending.

October 20, 2008

  The Fed's Caja Madrid approval order is one of the most superficial and conclusory to date, ignoring several of the adverse issued raised, and merely pasting in a boiler plate paragraph about fair lending concerns...

It's telling, in terms of how sloppy the corporate giveaways have been, that the Fed did not think through how buying warrants in the big banks would put them in the position of reducing book value or recording a loss. What a regulator...

October 13, 2008

Tales for a time of lawless regulators giving rubber stamp bank merger approvals without any public notice or comment, Chase and now Wachovia --

On October 10, the Federal Reserve Board sent Inner City Press a partial response to a Freedom of Information Act request made back in March, about the Fed voting without public notice or comment to bail out JPMorgan Chase's acquisition of Bear Stearns without even following the law requiring the involvement of Fed governors. Six months after the fact, the Fed releases an April letter to Congress saying the Governor Mishkin, who has since left the Board, was in the air on a flight from Finland to the U.S. and therefore couldn't be involved. Click here to view. And now he's gone...

  There are other responsive records, still not given or denied, which Inner City Press will be pursuing.

 Meanwhile, while Inner City Press / Fair Finance Watch has already commented to the Fed demanding they hold a comment period on Wells Fargo's proposal to buy Wachovia, now Wachovia says it will bypass its own shareholders -- with the NYSE's rubber stamp. Note to Fed: this doesn't make it an emergency to bypass the public too. But the Fed on Friday said, vaguely, that it will begin "immediate consideration" of Wells Fargo's application.  But no FDIC involvement = no emergency.

RBS is pleading for a bailout from the UK... When Inner City Press / Fair Finance Watch commented, at length and over years, about RBS' involvement in and exposure to predatory subprime lending, RBS always said it wasn't true...

October 6, 2008 -- for an angry debate by Inner City Press on the bailout, click here

  From what are now the Fed's regulators, " Taiwan's Financial Supervisory Commission said late Sunday the three investment units of American International Group Inc. (AIG) on the island have sound fundamentals, but it will monitor their operations closely. 'The commission will monitor closely the three companies' financial and operation changes, and will take appropriate measures when needed,' the island's top financial regulator said in a statement. AIG said Friday all of its non-insurance businesses are for sale. Outside the U.S., AIG said it wants to keep at least a majority stake in American International Assurance Co., which sells life insurance and retirement products in China, Thailand, South Korea, Australia, New Zealand, Vietnam, Indonesia and India." Has the Fed signed off on this?

September 28, 2008

  First on the fringes and now on Fox News, the Community Reinvestment Act is being blamed by some for today's financial crisis. The argument is that by encouraging FDIC-insured banks to lend in lower income neighborhoods, the government -- read, Democrats, from Jimmy Carter to Bill Clinton -- created the explosion in high interest rate subprime loans.

   There's a major factual problem, though: with a single exception, no bank sought CRA credit for its subprime loans. And the investment banks which were purchasing, bundling and securitizing the loans were not covered by CRA. Bear Stearns was not covered by CRA, but was bailed out by the Federal Reserve Board for $30 billion dollars. AIG, an insurance company, was not covered by CRA, but its subprime activities have led to a $75 billion loan from the Federal Reserve, which claimes that it does not control AIG, despite owning warrants for 79% of its stock...

September 22, 2008

  So with its $85 billion bailout of AIG, the Federal Reserve will come to run a predatory lending operation. Click here for some Inner City Press / Fair Finance Watch comments. And see here.  But it goes beyond that -- shouldn't the Fed have to apply to the Office of Thrift Supervision to come to control AIG's savings bank? We'll be raising this issue this week.

September 15, 2008

  As the Federal Reserve through the New York Fed is involved in trying to set up yet another bail-out, the two most recent speeches on the Fed's web site are Bernanke on historically black colleges, and Kohn on academic articles...

And see, As US Tightens Insurance Sanctions on Iran, Lloyd's of London Writes Myanmar Policies

September 8, 2008

  Incoming Freddie Mac chief David Moffett previously served as chief financial officer of U.S. Bancorp, which beyond its own subprime lending was a 25% investor in the now-bankrupt subprime lender New Century. When Inner City Press investigated U.S. Bancorp's stake in New Century, the company argued to the Federal Reserve that despite having two seats on the board of directors it did not control the lender. The Fed dodged the question until U.S. Bancorp eventually sold the stake...


September 1, 2008

  The WSJ has pegged New York Federal Reserve President Timothy Geithner to be Treasury Secretary in an Obama administration. Oh the profits of bail-outs...

  How to explain Citigroup changing former Treasury Secretary Bob Rubin's title to Senior Counselor? Here's our guess -- as the company has gone downhill, the finger has focused on Rubin. He doesn't like it -- just as he denied having any role in Citigroup's predatory lending, saying it wasn't under his "aegis" -- and so he changes his title. But under whose aegis is it?

August 25, 2008

  Bernanke's spin: "the Federal Reserve took actions that facilitated the purchase of Bear Stearns and the assumption of Bear's financial obligations by JPMorgan Chase & Co. This experience has led me to believe that one of the best ways to protect the financial system against future systemic shocks, including the possible failure of a major counterparty, is by strengthening the financial infrastructure, including both the "hardware" and the "software" components. The Federal Reserve, in collaboration with the private sector and other regulators, is intensively engaged in such efforts. For example, since September 2005, the Federal Reserve Bank of New York has been leading a joint public-private initiative to improve arrangements for clearing and settling trades in credit default swaps and other OTC derivatives."

  So, the lesson learned from a bailout with no public comment is a rulemaking with the industry with no input from the public...

August 18, 2008

  Like a coup leader trying to ex post facto legalize their seizure of power, the Federal Reserve has included in its "Legal Developments 2nd Quarter 2008" publication released last week its Orders - with no public comment allowed -- bailing out Bear Stearns and letting JPM Chase buy it, available at http://www.federalreserve.gov/Pubs/Bulletin/2008/pdf/legalq208.pdf .All the patina of legality with none of the content...

August 11, 2008

 So Elizabeth Duke was sworn in as a Governor -- the man from Capital One, not so much...

August 4, 2008

  Ah, FBSEA-- " The Federal Reserve Board on Thursday announced the approval of an application by International Bank of Azerbaijan, Baku, Azerbaijan, to establish a representative office in New York"....

July 28, 2008

  So in fairness we can note that the Fed doesn't only do favors for JPMorgan Chase (on Bear Stearns) and Citigroup (on any and everything, including the Group's formation) -- last week the Fed belatedly released a ruling favoring SunTrust in its dealings with its presumptively illegal but "grandfathered" holdings of Coca-Cola story - click here to view.

  The Fed justifies its favor as reducing the mixing of banking and commerce. Coke as a mixer?

July 21, 2008

The Wall Street Journal.com reports that the Boston Fed's foreclosure-fest at Foxboro's Gillette Stadium will include Countrywide (now BofA) and... IndyMac. From beyond the grave? Or will the FDIC be (Eli) manning the tables?

July 14, 2008

    Approvals with no prior public notice, much less comment: In a letter dated July 1, the Fed granted a request to allow JPMorgan Chase Bank to purchase a $44 billion portfolio of Bear Stearns derivative transactions and hedges acquired by the holding company when it bought Bear Stearns. The portfolio includes Bear Stearns Forex Inc. and Bear Stearns Credit Products Inc. The Fed spun that "the proposed transaction in this case is a byproduct of a one-time corporate reorganization and would facilitate the integration of recently merged companies," and granted the waiver. The Fed also granted JPMorgan's request to exempt from Fed rules certain transactions between the firm and Maiden Lane LLC - the limited liability company set up with the Federal Reserve Bank of New York to hold some Bear Stearns assets.  "Although (JPMorgan Chase) has a substantial subordinated exposure to Maiden Lane, the (New York Fed) has the predominant economic interest in Maiden Lane," the letter from the Fed to JPMorgan, dated June 26, stated.  "Granting the exemption also appears to be in the public interest because it will facilitate the consummation of the (New York Fed) facility," the Fed letter said. So the Fed considers consummation of its own transaction to be in the public interest. But did they hear from the other sides?

  Annals of oversight:  "Bernanke said the Fed consulted Congressional leaders during the weekend in March when it decided to facilitate the Bear Stearns rescue, and that he didn't get the sense that there was any objection."

July 7, 2008

  Here is an outrage on which action must be taken -- the purportedly "off the record" speeches given to audiences of select investors by Federal Reserve personnel. They are sent out by email to journalists, but not to write about. Hedge fund artists get insider knowledge from the Fed, and trade on it. Doesn't this violate, at least in spirit, Reg FD, Financial Disclosure?

 But look for Ben Bernanke to on the record defend the bailouts before Congress on July 10. Who actually questions him will be interesting to see.

June 30, 2008

   Weeks late, the Federal Reserve has written to Inner City Press that

This is regarding your FOIA request for documents related to the JP Morgan / Bear Stearns transaction. We have interpreted your request to include the Board meeting minutes from Mar. 14 and 16. The minutes are now available online on the Board's public website:
http://www.federalreserve.gov/newsevents/press/other/20080627a.htm
We will be contacting you shortly about the scope of the remainder of your request.

   For now, as even the Dow Jones story on the minutes reports, "four Fed board members were involved in making the decision to come to the rescue of Bear, the Fed's minutes show."

June 23, 2008

The filing on June 15 by Inner City Press / Fair Finance Watch against the Federal Reserve Bank of New York's closed-door meetings and rule-making with 18 investment banks has given rise to questions about whether or not the Fed is a government agency with any duties to the public. On Daily Kos, for example, various commenters say that the Fed is owned by banks. We note that's the Federal Reserve Banks; the BOARD had governmental duties, including compliance with the Administrative Procedures Act. Expect more comments to the Fed.

June 16, 2008

   This week with the Federal Reserve, Inner City Press / Fair Finance Watch filed comments against the applications by Spain's Caja Madrid, funder of biofuel projects and 23% owner of Iberia airlines, to acquire City National Bank of Florida, and against the Federal Reserve Bank of New York's secret process with banks, in essence a rule-making excluding the public even those the topic, credit derivatives, has come up because of the subprime lending crisis. The financial institutions invited -- and now challenged -- are listed below.

Bank of America, N.A., Barclays Capital - BNP Paribas - Citigroup - Credit Suisse - Deutsche Bank AG - Dresdner Kleinwort - Goldman, Sachs & Co. - HSBC Group - JPMorgan Chase - Lehman Brothers - Merrill Lynch & Co. - Morgan Stanley - The Royal Bank of Scotland Group - Societe Generale - UBS AG - Wachovia Bank, N.A.
Buy-Side Firms: AllianceBernstein - BlueMountain Capital Management LLC - Citadel Investment Group, L.L.C.

  The Administrative Procedures Act (5 U.S.C. Section 553) and related laws require that when the government engaged in rule-making, it must provide notice to the public, and allow and weigh public comments.  Here, the FRBNY has tried to rule-make without any involvement by the public, even the public most impacted by the subprime lending that underlies this FRBNY process. Rather, for example, the FRBNY on June 9 met with a group of the largest banks to discuss, according to the FRBNY's president,

"Regulatory policy. These are the incentives and constraints designed to affect the level and concentration of risk-taking across the financial system. You can think of these as a financial analog to imposing speed limits and requiring air bags and antilock brakes in cars, or establishing building codes in earthquake zones.
"Regulatory structure. This is about who is responsible for setting and enforcing those rules.
"Crisis management. This is about when and how we intervene and about the expectations we create for official intervention in crises."

 But when rules are being set, to use Mr. Geithner's own analogies, for air bags, brakes, speed limits or building codes, the agencies at issue are not allowed to and do not only take input from the industry.

     Press accounts make clear that the financial instruments and regulatory issues discussed behind closed doors are related to issues of public interest, which in fact are disproportionately impacting low- and moderate- income people and communities of color -- subprime and predatory mortgages.  AFP of June 9 reported that

"those swaps are designed to transfer the credit exposure of fixed income products between parties and often have been linked to US subprime, or high-risk, mortgages... Trading in derivatives, financial securities whose value is derived from other financial securities, was a major factor in the subprime, or high-risk, mortgage crisis that rocked markets last August and has spread through the global markets... Geithner defended the Fed's decision to finance the Bear Stearns - JP Morgan Chase merger in March, saying it was done only with great reluctance and only because there seemed to be no other choice as Bear Stearns reeled from soured mortgage-related investments. 'It was the only feasible option available to avert default,' he said, and 'we did not believe we had the ability to contain the damage that would have been caused by default.' The Fed acted only to 'facilitate an orderly transition,' not 'to preserve the company,' Geithner said."

   Here, it appears that the FRBNY is trying to take the closed-door, no public notice Bear Stearns - JPM Chase process several troubling steps further, providing access to 17 mega-banks but still not the public. 

This closed-door, industry top-heavy process is unacceptable and, Inner City Press has now timely contended, is contrary to law, under 5 USC 553 and otherwise. Watch this site.

June 9, 2008

 So would whoever's the new President ask Bernanke to suggest four replacements on the Federal Reserve Board? Gov. Frederick Mishkin announced on May 28 that he would leave the board at the end of the summer. Two other Fed governor positions have been open since last year and Gov. Randall Kroszner has remained in his seat even though his term expired Jan. 31.

  Whatever happened to checks and balances?

June 2, 2008

  Econ-talk: Fed Vice Chair Kohn has been pitching the idea of giving Wall Street securities firms permanent access to Federal Reserve loans. Permanent bailout? Note to the Fed: Citigroup and JP Morgan Chase have been wildly understating their borrowing costs for LIBOR calculations, in order to hide what those in the know think of these two companies and their prospects...

May 26, 2008

  In a May 9 meeting in which he was criticized for the Bear Stearns bail-out, the Fed's Ben Bernanke expressed interest in local concessions from banks on interest rates, but little desire to clamp down on predatory lending, or extend the Community Reinvestment Act to non-banks...

May 19, 2008

In a speech on May 15, Federal Reserve Governor Frederic Mishkin said, “Our regulatory framework should be structured to address failures in information or market incentives that contribute to credit-driven bubbles." But where was he when the other Fed governors rubber-stamped the first part of the Bear Stearns bail-out by JPM Chase, which required unanimity?

May 12, 2008

 From Gov. Kroszner's speech last week --

"The cost of foreclosures is not limited to individual homeowners.  Communities in which a high number of foreclosures have occurred are increasingly faced with large numbers of properties held by lenders or servicers as "real estate owned," or "REO."  REO is costly to hold, and many lenders are not well equipped to handle large REO inventories.  As a result, the number of vacant homes in some neighborhoods has increased markedly.  After averaging about 1.7 percent starting in 1990 through 2006, the home-vacancy rate rose sharply in 2006 and hit 2.9 percent in the first quarter of 2008, according to the U.S. Census Bureau. Properties left vacant for long periods have many negative effects on a community.  Research indicates that foreclosures tend to reduce the value of nearby properties; the magnitude of these price declines appears to differ, depending on the presence of variables such as the strength of the local housing market or the distance between a foreclosed home and other surrounding homes."

  And that's why cities like Baltimore and Cleveland are suing predatory lenders, like Wells Fargo -- click here for a report this week to Inner City Press from a whistleblower..

May 5, 2008

  Some savvy analysts last week portrayed Bernanke and the Fed as faced with a choice between further bail-out of Wall Street for the subprime sleaze, or trying to mitigate food prices leading to famine in the developing world. Guess which way Bernanke and his rubber-stampers went?

April 28, 2008

 From Scott Alvarez' April 24 testimony -- "Citigroup recently received a capital infusion from the Kuwait Investment Authority (KIA), the Abu Dhabi Investment Authority (ADIA), and the Government of Singapore Investment Corporation (GIC), one of Singapore's two sovereign investment funds.  None of these funds acquired more than 5 percent of Citigroup's total equity.  Three sovereign wealth funds, the Korea Investment Corporation (KIC), Temasek, and KIA, each made similar noncontrolling investments in convertible preferred stock in Merrill Lynch and Co.  These are all passive investments that have not triggered formal review under U.S. banking law."  And is that wise?

April 21, 2008

  The Federal Reserve continues to hit new lows.  In an order dated April 1 (mailed out on April 11), the Fed purported to review -- with no public input -- and approve JPMorgan Chase's proposal to acquire Bear Stearns and its New Jersey-based bank, Bear Stearns Bank & Trust. "Based on all the facts and circumstances, the Board has determined that an emergency exists requiring expeditious action on the proposal." So much for CRA... To be continued.

April 14, 2008

   Delaware vice-chancellor Donald Parsons has stayed litigation challenging the proposed acquisition of Bear Stearns by JPMorgan Chase, deferring to a similar court case in New York. Parsons noted that the Delaware lawsuit mirrors five lawsuits that have been consolidated on an expedited basis by the New York Supreme Court. That court has scheduled a May 8 hearing on a preliminary injunction barring a shareholder vote to approve the deal. "The judge also noted the unique circumstances of the planned government-assisted merger" -- so now, the Federal Reserve's outrageous exclusion of any public review of the deal is used by court to avoid judicial review...

  And this is not even dealing yet with the Fed's sleazy deal with Blackrock, answers on which are due on April 18...

  There's something positively ghoulish, in Greg Ip's Greenspan story last week, about letter extracted on his death bed from Ned Gramlich, that "I truly wish the press would stop kicking you around on this subprime supervision issue. What happened was a small incident." The reference, as Ip tells it, was to

"In 2000, then-Fed governor Edward Gramlich, who was in charge of the Fed's consumer affairs, proposed to Mr. Greenspan that the Fed's staff examiners look for abusive lending practices in banks' lightly regulated mortgage affiliates. In an interview with The Wall Street Journal last June, three months before his death, Mr. Gramlich said that at the time, he generally considered subprime loans a good thing. He didn't then know the extent to which the loans would become a problem, but he wanted the 'Fed to be a leader' in cracking down on predatory lending. Mr. Greenspan recalls that he demurred, saying that the Fed shouldn't have oversight of these lenders. Shady operations could portray their Fed-regulated status as a seal of approval, he suggested, giving them unearned credibility with customers."

            But if Gramlich was pushing for exams of BANK-AFFILIATED lenders, like CitiFinancial, these were already benefiting from a bank- and FRB-affiliated status...

April 7, 2008

            The U.S. Federal Reserve Board, while still trying to avoid any public comments on or review of the controversial Bear Stearns - JPMorgan Chase bail-out, has agreed to hold public hearings on Bank of America's Countrywide application, in Los Angeles on April 22 and in Chicago on April 29. Inner City Press and Fair Finance Watch had requested the public hearings, and in preparation are submitting to the Federal Reserve that Countrywide in the Los Angeles MSA in 2007 confined 18.91% of its African American borrowers to higher cost loans over the rate spread. Countrywide in the Chicago MSA in 2007 confined African Americans to higher-cost loans 1.93 times more frequently than whites, while confining Latinos to higher-cost loans 1.35 times more frequently than whites.

March 31, 2008

  Ironic in light of the Fed's highly-questionable bail-out of Bear Stearns via JPM Chase, the Minneapolis Fed's Gary Stern last week intoned "A final TBTF comment: Recent events have likely reaffirmed and strengthened some creditors' expectations of support, or have created those expectations for the first time. I think one would be hard pressed to dismiss our analyses or proposals by claiming that such expectations do not exist. On the opposite end of the spectrum, some might dismiss our suggestions, arguing that we cannot influence creditors' expectations. I reject that view as equally untenable. We simply cannot allow widespread perceptions of government support to pervade the financial system."

  So what is the Fed going to do about it?

March 24, 2008

   Since the Fed is essentially a participant in the JPM Chase-Bear Stearns deal, how can it purport to regulate it? And since the Fed is now an interested party in how Bears' portfolio of subprime loans performs, how can it be objective?

March 17, 2008 WashPost - Guardian (UK)

            The day after news of the Federal Reserve's murky bailout of Bear Stearns through JPMorgan Chase, Inner City Press / Fair Finance Watch filed with the Federal Reserve Board in Washington, and the Federal Reserve Bank of New York, a petition, complaint and series of requests, portions of which are available by clicking here. So where was Gov. Mishkin?

            On Fed chair Bernanke's way to the podium for his speech in DC on Friday, Inner City Press asked him if he would be taking any questions. "No," he said, remaining expressionless as Inner City Press called after him, "Bear Stearns?  JPMorgan Chase? Why?" His speech, purportedly on the subprime lending crisis, did not even mention the role of securitizers.  And when it was over, his entourage decamped in two large black cars, license plate BJ 3135, out onto D Street with siren lights on top...

March 10, 2008

  Sources tell Inner City Press that the Federal Reserve Bank of New York placed online zip code specific foreclosure data, then quickly pulled it back. But too late, as we intend to cover, quantitatively, going forward...

March 3, 2008

  As far back as February 18, the Federal Reserve Bank of Richmond said it had Bank of America's application to acquire Countrywide. But for days, no notice was published by the Federal Reserve in DC. Finally it was posted, with a comment period to March 31. Let the commenting begin!

February 25, 2008:

        As the beginning of the 2007 HMDA data season approached, the Fed has let another year go by without providing simple guidance. Soon there will be requests to extend comment periods on Bank of America - Countrywide, until each institutions provides its 2007 data. And that will only be the beginning...

February 18, 2008

  Last week at the UN, several states' pension funds and other institutional investors spoke of pushing the SEC to deal with companies' exposure to climate change. Inner City Press asked if they were also pushing the Federal Reserve in this regard. No, was the answer. Not YET, that is...

February 11, 2008

On Royal Bank of Canada and the pawnshops and quick cash joints, the Fed had this to say, that ICP Fair Finance Watch

"expressed concern about RBC Centura's relationships with unaffiliated pawn shops and other nontraditional providers of financial services. As a general matter, the activities of the consumer finance businesses identified by the commenter are permissible, and the businesses are licensed by the states where they operate. RBC Centura has stated that it conducts substantial due diligence reviews of its customers who provide alternative financial services, including reviews of anti-money laundering and Bank Secrecy Act compliance, and that it does not play any role in the lending practices, credit review processes, or other business practices of those firms."

  Sounds like the Fed's approach to subprime mortgage lending, before the fall..

February 4, 2008

  In quiet Fed political news, Paul Volcker last week was reported to endorse Barack Obama. And what of Alan Greenspan, now advising Deutsche Bank?

January 28, 2008

            How shameful that the Fed got spooked by Societe General's sell-off, and won't even criticize them publicly... And ex-FRBNY Ernie Patrikis, now through the revolving door a partner at Pillsbury Winthrop Shaw Pittman, was quoted last week that mortgage "servicers must act in the best interest of investors"...

January 21, 2008

            On Toronto Dominion's application to buy Commerce Bank, despite an evasive purported response from TD's law firm Simpson Thatcher, TD has had to re-apply to the Federal Reserve, opening up a new comment period...

            Try this on for irony -- Paulson & Co., the New York-based hedge fund which made massive money off the foreclosure frenzy in which predatory lender culminated, has put Alan Greenspan, who at the Federal Reserve allowed it all to happen, on its advisory board...

January 14, 2008

    The Fed has appointed to its "Consumer" Advisory Council Kevin Rhein, a representative of Wells Fargo, which was sued last week by the City of Baltimore for predatory and discriminatory lending...

January 7, 2008

The communication policy of the Federal Reserve is currently a work in progress, Fed Vice Chair Donald Kohn told the American Economic Association. Ya don't say...

December 31, 2007 

            "We want consumers to make decisions about home mortgage options confidently, with assurance that unscrupulous home mortgage practices will not be tolerated," Fed chairman Bernanke said. But why then allow five year prepayment penalties, and yield spread premiums?

December 24, 2007

  Speaking like a supplicant in Charlotte, Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, last Wednesday defended the Fed's plans to belatedly clean up predatory lending. In a brief Q&A session, Lacker said the Fed is offering a "set of significant measures," but not banning Yield Spread Premiums, only required that they be disclosed. Eliminating such practices, Lacker said, "could raise mortgage borrowing costs." But what of the costs of predatory lending?

December 17, 2007

  With the Fed slated to announce its long overdue predatory lending rules this week, as early as Tuesday, December 18, and with the rules expected to leave prepayment penalty abuse unreformed, it's worth remember this quote from Roger T. Cole, the Fed's director of banking supervision and regulation, to the Senate Banking Committee in March: "Given what we known now, yes, we could have done more sooner." Yeah....

December 10, 2007

  Governor Kroszner last week told the House, "We would recommend that the amount of such civil money penalties, if imposed, be given a ceiling as well as a floor because of the market uncertainty that can be introduced by open-ended liability. We would also suggest that some discretion in the actual amount of the penalty, within such a range, be given to the enforcing agencies. This sort of flexibility in enforcement would help the agencies adjust the punishment to fit the infraction." So, the Fed wants to cap predators' liability, and to be given discretion even under the cap...

December 3, 2007

   Story of the week, capturing the decade, is the Charlotte Observer's Sunday overview, "Banks fail to escape sting of subprime." The subtitle is "They pulled back from scrutinized loans, but investment arms didn't," and the two main banks covered are the Charlotte twins, Bank of America and Wachovia. Both claimed to have gotten out of subprime, BofA all the way back in 2001. Then this quarter they have announced subprime-related write-downs of $3 billion and $1.1 billion, respectively. Clearly, they were not out of subprime. And what of the Federal Reserve, which repeatedly ignored detailed comments on mergers and accepted the banks' statements, now shown to have been incorrect, about their business?

November 26, 2007

 Another regional president of the Federal Reserve, which stood by while the subprime mess gathered force, has now cautioned against over-regulation. "Some reforms might impose significant costs and contribute to outcomes we would prefer to avoid. Ultimately, policymakers could find themselves relearning old lessons rather than improving social welfare," Minneapolis Fed President Gary Stern said last week in Singapore...

November 18, 2007

  The Fed's defenders claim that in its Consumer Advisory Council, real work is getting done. From the outside, there's been nothing -- no enforcement action on disparities in HMDA data and high cost lending, no enforcement through the merger review process, nothing...

  In the Senate, a red flag has been raised about the attempt to give Gov. Kroszner a new 14-year terms. And still not action on Elizabeth Duke of Towne Bank and Larry Klane of Capital One Financial Corp, the high-cost card and mortgage lender...

November 12, 2007

  Fed Governor Randall Kroszner has focused on an molehill while the mountain of subprime sleaze collapses around him.  To the Consumer Bankers Association Kroszner boldly took on lenders' failure to escrow for taxes and insurance, saying these can lead to a situation "akin to payment shock for borrowers. It is a common practice for these payments to be escrowed in the prime markets, and I see no reason that escrows should not be standard practice in the subprime markets too," he said.   His Fed-chosen boosters cheered, You go, Randy!  "Given the substantial number of resets from now through the end of 2008, however, I believe it would behoove the industry to join together and explore collaborative, creative efforts to develop prudent loan modification programs and other assistance to help large groups of borrower systematically," he said. A bit better...

November 5, 2007

   From the WSJ last week: "On Aug. 8, Mr. Rubin called Mr. Bernanke. The Citigroup executive said he suspected a lot of people were telling Mr. Bernanke he should have cut rates. Yet Mr. Rubin said he thought the Fed had done the right thing, say people familiar with the call."

  Questions: is it appropriate for the head of the largest bank's office of the chairman to just dial up the main regulator and shoot the breeze? When that largest bank has massive bets on predatory subprime? What else was said?

October 29, 2007

            The Fed through Kroszner last week defended sleazy securitizers: "The securitization market is critical to increasing the resources available to fund home purchases and great care should be taken to ensure that investors in the securitization market can quickly and accurately assess and mitigate the risks, including the compliance risks, of mortgages sold in this market. Such laws should be very clearly delineated to ensure that they do not have a detrimental impact on the ability of lenders to securitize loans." Kroszner echoes the ABA's criticism that the bill "would increase costs and decrease choices for consumers."

October 22, 2007

  Miller-Watt-Frank, it is reported, may exclude the Fed from rulemaking. Use it or lose, it, Rep. Frank had said. The American Banker quotes an ex-Fed lawyer spinning that the Fed's exclusion may be inadvertent. Yeah, right...

October 15, 2007

  So Alan Greenspan spent $25,000 to fly himself and one staffer back and forth to London. He says he never know about the subprime problems, despite activist wagging their jaws in front of him for meeting after meeting. Maybe he was mind-dialing rich man's Travelocity while they spoke...

October 8, 2007

  The Federal Reserve's general counsel Scott Alvarez, in testimony to Congress last week about Industrial Loan Companies, offered rare plug for CRA, which some say the Fed's actual practice, of review of CRA in mergers, does not justify: "The ILC exception undermines these requirements by allowing financial firms to own and operate an FDIC-insured bank without abiding by the capital, managerial, and CRA standards established in the GLB Act." But if the Fed wanted there to be CRA standards, they wouldn't rubber stamp approvals, increasingly with less and less detailed review. This point was lost amid the focus on commercial companies owning ILCs. Cynics say that the Fed just wants jurisdiction over everything -- that the Fed has no problem with loopholes, only with those that it doesn't control...

  Meanwhile, south of the border approval has been procured for Banco Wal-Mart de Mexico Adelante, which Citigroup says will open 10 to 12 branches in the next year. Then again, in the 12 months to June 2007, Citigroup in Mexico opened 207 retail bank and consumer finance / Citifinancial branches.

October 1, 2007

  As Capital One's Larry Klane is slated to join the august (?) Federal Reserve Board, the Detroit News of Sept. 28 lists Capital One as one of top three lenders for cosmetic surgery --  Capital One Healthcare Finance: www.capitalonehealthcarefinance -- How do you think they foreclose? Nip/Tuck, is this predatory lending? Maybe Ben Bernanke will ask...

September 24, 2007

  This month has seen the spectacle of Alan Greenspan claiming he wasn't told what was happening with predatory lending. But community groups, in ceremonial (or window-dressing) meetings with Greenspan raised the issues in detail, about securitization of toxic loans and who was buying them. Greenspan nodded and did nothing. And now he sells his book, and defends his right to sell advice and access. Shameful...

September 17, 2007 -- As Fed Releases Mortgage Study, Subprime Disparities Worsen at Citigroup, HSBC, Wells

In the same week that Bank of America set a record, jacking up its surcharge for the use of ATMs to three dollars, the Federal Reserve hauled off and delivered an approval, of BofA's takeover of LaSalle. The Fed seems to have ignored most of the issues raised. For example, the Fed states that ICP and Fair Finance Watch

"expressed concerns about Bank of America’s relations with unaffiliated third parties engaged in subprime lending. The commenters provided no evidence that Bank of America has originated, purchased, or securitized 'predatory' loans or otherwise engaged in abusive lending practices."

            Did the Fed even consider BofA's re-entry into originating subprime, with its propping up of Countrywide, which has settled charges of racial discrimination in its subprime lending? The Fed also makes light of BofA's mounting compliance violations:

"A commenter opposing the proposal expressed concern about Bank of America’s connection to investigations and lawsuits related to the bankruptcy of Parmalat SpA, Parma, Italy. The commenter also expressed unsubstantiated concerns about Bank of America’s student loan policies [and] the handling of certain money transfers through the New York branch of Bank of America, National Association."

            To be continued. 

Meanwhile, Citigroup's Mexican banking arm Banamex and a group of Mexican investors said Wednesday they plan to launch a $150.7 million counter offer for airline Consorcio Aeromexico SA (AMEXICO.MX), which is currently the target of a takeover bid by two local businessmen.  Banamex said the group has requested authorization from the National Banking and Securities Commission and the Federal Competition Commission.

            What about the U.S. Federal Reserve, putatively Citigroup's comprehensive supervisor? Citigroup can own airlines outside of the U.S.?

September 9, 2007

    In Larry Klane's ongoing drive to join the Federal Reserve Board, now this DJNS quote: "Mr. Klane's involvement in subprimes raises questions, but we'll withhold judgment until we get answers," said Sen. Charles Schumer.

            The Capital One unit at issue used to be called eSmartLoan before Cap One bought it. As previously analyzed by Inner City Press, in 2004 eSmartLoan made 144 super high cost HOEPA loans (loans subject to the Home Equity and Ownership Protection Act, in essence costing at least eight hundred basis points over comparable Treasury securities). The HMDA-LAR file included 2193 higher cost, rate spread loans  (loans three hundred basis points or more over Treasuries on a first lien, five hundred on a subordinate lien). All of these high cost loans were reported, as to race, “Information Not Provided.”  The originations in the file for which race was reported are predominantly in Missouri and Kansas. ICP takes these to be the retail loans of National Bank of Kansas City, from which Capital One acquired eSmartLoan, which is a subprime lender directed at many more states.  Of the over 6000 race-not-reported loans, one-third of them rate spread, only four were in Kansas, and only four in Missouri. The rest were all over the country -- high cost and race not reported...

September 3, 2007

  While Fed watchers make much of if and when Bernanke will move to cut the fed-funds rate, his hands-off approach to consumer protection, and even the provision of information to consumers, strike us as more indicative...

August 27, 2007

From Sen. Dodd's press conference after meeting with Fed chair Ben Bernanke:

Q You helped during the predatory lending -- (off mike) -- legislation. But why has the Senate failed to act of any of the -- (off mike)?

 SEN. DODD: Well, again, look, the Fed is moving on this. We have HOEPA legislation, which passed in 1994, which mandated that the Fed assume responsibility of dealing with deceptive and fraudulent practices. I have been critical of the Fed for not acting, particularly when we're -- we know that three and a half years ago, Fed staff was becoming aware of this emerging problem. They tell me they're going to have these regulations in place by this fall. If that's the case and they're moving, then I'm satisfied that that's going to be done. But I'm also simultaneously going to be looking at the possibility of legislating this area. But I don't want it made more confusing by taking that action prematurely.

 Q Why hasn't the Senate considered this legislation sooner?

 SEN. DODD: Well, again, I think because of existing laws here, you could deal with it here, and it seems to me the regulatory body has the responsibility of developing the regulations in this area. So we've established the law 13 years ago. The Fed was charged 13 years ago with adopting regulations. It wasn't a request of them; it was a mandate of them to do so. And so, in a sense, the power exists there for them to do what we'd be doing with legislation, I assume, anyway.

            So, according to Dodd, the Fed is "moving on this" -- we and logic disagree, but it's noteworthy that the Fed has no problem with those who meet Bernanke speaking out afterwards. Why then the off the record lunch with Reuters reporters? We'll see.

 

August 20, 2007

  Why is it that the Federal Reserve's sudden interest rate cut has the feel of a cover-up? That is, after having allowed predatory lending to flourish, and then the resulting financial chaos (two months ago, the Fed dismissively called the subprime problem "contained), it finally acted to prop up the markets, because too many fingers were starting to point back at 20th Street and Constitution Avenues...

  From the august (15) Argus Leader in South Dakota:

The court of public opinion already appears polarized on what critics call predatory lending practices - companies charging exorbitant interest rates and penalty fees. "'It's not illegal, but it's very unethical,' said Richard Cook, a former federal government analyst and author who lives in College Park, Md. 'It's legalized loan-sharking. It was one of the specialties of the Mafia. But that's one organized crime doesn't have to do now because it's legalized.' Sioux Falls Mayor Dave Munson, who worked 18 years for Citibank, calls that criticism unfair."  So, from Citibank to mayor in the city Citi ran to, to export high rate, which are called "unethical" by an ex-Fed consultant...

On an entirely different note, there is the sadness of learning about Ned Gramlich's sickness, in Saturday's NY Times. Here's hoping that his decision to eschew treatment works out for the best...

August 13, 2007 -- Greenspan's Shameless Cash-Out to Deutsche Bank Is a Sub-Crime, Consumers Complain

            The Federal Reserve, intent on seeming earnest, more quietly claims to be bereft of power. Case in point? The Fed, when asked about banks which refuse to provide their mortgage data in electronic format, pretends to be surprised. Later, more quietly, the Fed claims it has no authority to tell banks to be reasonable, and not opening evade the spirit of the rules. But isn't that the problem? As the House Banking Committee is saying, "use it or lose it."

August 6, 2007

  Larry Klane of Capitol One, charged with fraudulent marketing by several state attorneys general, told the Senate last week that, if confirmed, he "would bring my energy, focus, and experience to vigorously fulfilling the Fed's consumer protection responsibilities." Why don't we believe that?

July 30, 2007

   Banco Santander was reported last week to have continued to do business with sanctioned Bank Sepah until at least March 2007.  How this might impact the Santander - RBS - Fortis bid for ABN Amro, including their pending applications before the U.S. Federal Reserve, remains to be seen. Federal Reserve, take notice...

July 23, 2007

  Before the House of Representatives last week, Fed chairman Bernanke said:

"the recent rapid expansion of the subprime market was clearly accompanied by deterioration in underwriting standards and, in some cases, by abusive lending practices and outright fraud.... Rising delinquencies and foreclosures are creating personal, economic and social distress for many homeowners and communities; problems that likely will get worse before they get better. The Federal Reserve is responding to these difficulties at both the national and the local levels.  
   "In coordination with other federal supervisory agencies, we are encouraging the financial industry to work with borrowers to arrange prudent loan modifications to avoid unnecessary foreclosures.  Federal Reserve banks around the country are cooperating with community and industry groups that work directly with borrowers who are having trouble meeting their mortgage obligations."

  Meanwhile, William Poole, president of the Federal Reserve Bank of St Louis, said that poor decisions led to the losses and the funds that have suffered losses got what they deserved. A number of hedge funds have suffered significant losses, including Australian fund Basis Capital. Ben Bernanke, chair of the Federal Reserve Board, warned that sub-prime losses could increase to as much as $100 billion...
   Bernanke also said the Fed is "conducting a top-to-bottom review of possible actions we might take to help prevent recurrence of these problems."  An independent review, Volker-style, as they say, should be conducted into how and why the Fed was so hands-off as this happened....   

July 16, 2007

  Countdown on the Fed: Rep. Frank told Federal Reserve Board Governor Randall Kroszner at a committee hearing four weeks ago, "If the Fed doesn't start to use that authority to roll out the rules, then we'll give it to somebody who will." Now at the conference of the National Alliance to End Homelessness in Washington, Frank's said of the Fed, "If they haven't begun to spell out the rules under their authority, then we will take it away from them." Clear?

July 9, 2007

  The Mortgage Bankers Association's SVP for president for government affairs and public policy last week said that the Fed has "been doing exactly what it should be doing." The mortgage bankers would say that...

   This week, an ex-Fed regulator who monetize his expertise and access, first at Citi and now GE: "If it's now 2007 and the control failure occurred in 2005, 2004 ... is there going to be any value to law enforcement, any value to the government in finding things that happened two or three years ago and reporting it now?" The speaker of these words was identified by the American Banker newspaper as "Richard Small, the global anti-money-laundering leader at GE Money, the consumer and small-business financial services division of General Electric Co., and a former top anti-laundering official at Citigroup Inc. and the Federal Reserve Board, where he was a deputy associate director in the division of banking supervision."

  Then again, the American Banker newspaper also has a revolving door. From North Carolina, Citi's live checks: "a 78-year-old resident of Carolina Spring Apartments received a notice in the mail... appeared to be a real check from CitiFinancial Auto Corporation in Irving, Texas, a company that lends money for car loans over the Internet. Rob Julavits, spokesman for CitiFinancial Auto, saw a copy of the check that the Carolina Spring resident received, and said it was a fake. 'It is not a legitimate CitiFinancial Auto check,' he said. 'We are looking into the matter.'" Whether the check was authentic or not does not answer whether CitiFinancial continuing to send live checks to senior citizens is legitimate. And Julavitz... used to report on Citigroup for the American Banker, until Citigroup hired him...

   On the fortieth anniversary of FOIA implementation, a bill to restore some vitality to the law has been subject to a secret block -- by Arizona's Senator Kyle, media watcher can now report. For shame...

July 2, 2007

 From Fed Governor Randall Kroszner: "The guidance on adjustable-rate mortgages underscores that the Federal Reserve and other banking regulators expect lenders to make sure subprime borrowers not only can afford their monthly payments while the introductory rate is in effect but also after the interest rate resets."  We note that at the latest Fed Consumer Advisory Council, Bernanke skipped, while Kroszner attended. Meanwhile, Bernanke is slated for an "off the record" lunch at a wire service this coming week. Priorities, priorities...

Just after the Federal Reserve's rubber stamp approval, Mellon Bank has agreed to pay $16.5 million to the federal government to settle claims that it allowed overwhelmed employees to destroy thousands of federal tax returns and payments in 2001. Mellon had a contract with the Internal Revenue Service to process income tax returns and tax-payment checks. Mellon employees, feeling overworked and unable to meet deadlines imposed by the contract, destroyed more than 77,000 returns and checks totaling $1.3 billion ....

 Treasury's Paulson defense last week of using the Federal Reserve System to get around the Patriot Act was that "in April, the Macanese made the decision to release the funds. The Treasury supported that as a way to move the six-party talks forward." Now the Government Accountability Office is going to evaluate whether the U.S. government ran afoul of its own anti-money-laundering rules. Paul Anderson, a spokesman for the GAO, said Congress's investigative arm will decide whether to proceed with an investigation within the next week to 10 days. Molly Millerwise, Treasury spokeswoman, said, "we appreciate Congress's interest in safeguarding the U.S. financial system from abuse. The transaction the U.S. government helped to facilitate is fully consistent with all applicable laws and regulations." We'll see...

June 25, 2007

  At the Federal Reserve Bank of Cleveland, which has been protested, President Sandra Pianalto acknowledged that in "the fourth quarter of 2006, Ohio had the highest foreclosure rate of any state in the nation. We know that Cuyahoga County itself has been particularly hard hit. It is unfortunate that at a time when many people are rediscovering the hidden potential of our urban neighborhoods, the current trend in foreclosures might compromise some of the real progress that has been made." Then she said -- "Please understand that the Federal Reserve Banks are not rule-makers; that authority rests with the Board of Governors in Washington."

  In Washington, the Chairman and a Governor made a point of sitting down with flown-in activists, but committing to nothing. "It's very politically savvy on the part of the Fed" to hold such a meeting, even mortgage industry analyst Howard Glaser questioned. "Whether it translates into action remains to be seen."

June 18, 2007

   A new low for the Federal Reserve, it prosecutes money laundering while allegedly engaging in it, since unlike banks it is not subject the USA Patriot Act: " The decision to use the Federal Reserve Bank to return the [North Korean] money to the original account holders came after government lawyers concluded that the Federal Reserve was not subject to the same legal provisions as the commercial banks." LAT....

   Fed Governor Randall Kroszner last week said the Fed was struggling to figure out "how we can help to weed out abuses while also preserving incentives for responsible lenders."

   The Federal Reserve on June 14 hauled off and approved BONY - Mellon, saying in footnote 19 that ICP / Fair Finance Watch as

A commenter expressed concern about BONY’s relationships with unaffiliated third parties engaged in subprime lending. BONY has represented that it provides corporate trust and custody services relating to some issuances backed by subprime loans or involving issuers who originate or securitize subprime loans. BONY also indicated that it provides commercial credit to some originators of subprime mortgages. In addition, BONY noted that it acts as a swap counterparty in connection with some subprime loan securitization transactions and that its proprietary treasury portfolio, and some funds for which BONY acts as investment manager, include securities that may be partially backed by subprime assets. BONY has represented that it does not play any role in the lending practices or credit review processes of its customers who engage in subprime lending. The Board expects all banking organizations to conduct their operations in a safe and sound manner with adequate systems to manage operational, compliance, and reputational risk.

   CRA staff at the Fed as of mid-Thursday afternoon didn't know the application was being approved. This implies that no in-person meeting was even held on this major merger -- just "notational" voting. What a joke...

June 11, 2007

 Citigroup complains that in India it can only set up branches in Akola and Nanded in Maharashtra and Kurnool in Andhra Pradesh, and not in the metros or the big cities where it wants to expand its presence much faster. India had decided to block proposals for fresh licenses from American banks since the US has been sitting on applications submitted by State Bank of India, Bank of Baroda and ICICI Bank for many years. Live by the sword, die by the sword... US Trade Representative Susan Schwab promised that she would help the treasury department, the Federal Reserve and the Indian banks sit across the table and discuss the issue. Fed politics... Reportedly, the commerce ministry as well as RBI were against granting any concessions to US banks but it was the finance ministry which suggested that a different strategy could be tried and then leave it to the US to act. So the Fed operates for Citigroup, again...

  We'll report on / from Fed's June 14 hearings...

June 4, 2007

  The WSJ blogs that "Four of next year’s Federal Open Market Committee meetings will last two days instead of one, the newly released schedule shows. That’s the same as in 2007. Before Ben Bernanke became chairman, in 2006, it was rare for the Fed to have more than two such meetings per year....The continued use of two-day meetings could signify that debate will go on a while longer, or perhaps officials anticipate moving next year from releasing forecasts twice a year to three or four times, instead; that may require additional time to hash things out behind closed doors. Or maybe they just enjoy spending more time together."

   Whatever the rationale, consumers and communities sure haven't benefited from Bernanke's increased meeting times. In fact, on merger reviews the Fed is going less...

May 28, 2007

            Along with its bogus pronouncements about HOEPA and what it's done on subprime lending, the Federal Reserve appears to have in essence repealed or much limited the Community Reinvestment Act, most recently with regard to FDIC-insured institutions on Guam. Issues were timely raised to the Federal Reserve Bank of New York, on ANZ's application to a bank on Guam. In any other previous case, the comments would have been referred to the Board in Washington, which would have asked ANZ to answer questions and then weighed the answers. But in a break with precedent, another diss to CRA and consumer protection, now the FRBNY takes it on itself to approve such applications without even asking any questions.

  Here's a sampling of what the Fed ignored:

            Note that in New Zealand, ANZ and its subsidiary National Bank have when added together received the most consumer ombudsman complaints (259), see, New Zealand Press Association of November 29, 2006 --

"Commission chair Sir Ian Barker noted a recent review showed a ``worryingly high'' number of bank staff knew little or nothing about their own bank's complaints procedures. And more than half of bank branches in a recent survey did not display the Banking Ombudsman leaflet. He endorsed a key recommendation on accessibility by a former ombudsman, now Governor-General, Anand Satyanand, in his review of the 14-year-old scheme this year. Ms Brown said an increasing number of complaints were about consumer finance and Internet fraud or Internet banking."

            See also, "Lenders warned on limits, "The Australian Financial Review, November 14, 2006. ANZ's record in New Zealand, Australia, American Samoa, Cook Islands, Fiji, Kiribati, New Caledonia, Papua New Guinea, Samoa, Solomon Islands, Vanuatu, Tonga and Timor Leste should be reviewed, including at a public hearing, as a predictor of the impacts ANZ would have on Guam if allowed to acquire CSB.

            There are other questions, and not only related to the environment and weapons, see also, "Your loss not our problem, bank tells duped investor; ANZ Bank won't discuss 'personal matter,'" The National Business Review (New Zealand), September 16, 2005.

            ANZ enables and finances Rimbunan Hijau, the Malaysian logging company implicated in the widespread destruction of tropical forests in Papua New Guinea and elsewhere.  See, e.g., " ANZ linked to illegal logging," ABC Premium News (Australia), April 12, 2007.

  That is, the Fed ignored consumer protection as well as environmental / managerial issues. The regular-mailed May 18 letter of the FRBNY's Ivan J. Hurwitz says by rote that the Fed is not required to consider consumer protection or other issues outside of the United States. As one of the common sense rebuttals, what if an applicants consumer protection record where it does business, outside the U.S., is the only predictor of how it would run a bank in the U.S.? By this Fed logic, it would approve an application by an international loan shark to buy a bank in the U.S.. It is a new low for the Fed -- if the Board does nothing, the rot has re-spread to the top.

  Fed governor nominee Elizabeth "Betsy" Duke listed major holdings of a previous employer, Wachovia Corp., in financial disclosure forms filed in conjunction with her nomination to join the Fed Board. According to the disclosure forms, released Friday by the Office of Government Ethics, Duke reported holdings of Wachovia stock valued at between $5,000,001 and $25 million. She also reported holding Wachovia stock options.

  Note: mere divestiture would not cure this conflict...

May 21, 2007 -- Banker Described As Predatory May Join Federal Reserve, a Test for Senators, (c) Inner City Press

NEW YORK, May 20 -- The newest nominee to the U.S. Federal Reserve Board, recently under fire for inaction leading to the subprime lending and foreclosure crisis, comes from a notorious subprime lender, Capital One.

    Larry Allan Klane, whose nomination was announced on May 15, before that worked at Deutsche Bank, whose involvement with lenders sued for predatory lending such as New York's Delta Funding has like Capital One's record been an issue considered but not acted on by the Fed.

   With Fed chairman Ben Bernanke alternately promising greater scrutiny of and calling for restraint in restricting the subprime lending field, there are serious questions raised by the nomination of a longtime subprime lender to the Board. Whether these questions will arise in or even derail Klane's consideration by the U.S. Senate remains to be seen.

            The May 15 personnel announcement stated that "Mr. Klane currently serves as President of Global Financial Services of Capital One Financial Corporation.  Prior to this, he served as Managing Director of Corporate Trust and Agency Services at Deutsche Bank / Bankers Trust."

    The connection to Capital One, but not Deutsche Bank, was reported without comment in the Washington Post and financial news wire services. Even casual television watchers associate Capital One with advertisements featuring Nordic or medieval rampaging hordes along with the promise of no- to low-fee loans from Capital One, regardless of one's credit history.

            Capital One has been sued for these ads, and for the underlying business practices, by the state attorneys general in at least West Virginia and Minnesota. According to staff involved in these cases, Capital One has managed to get records of other enforcement actions against it sealed, as if the cases had never existed.

            Sometimes the traces of Capital One's cover-ups are still available. A filing obtained by Inner City Press from the West Virginia Supreme Court of Appeals, for example, recites that "on June 8, 2005, Capital One Bank filed an action... to seal all records, pleadings and matters in Civil Action Nos. 05-C-71 and 05-C-72 and to enjoin the Attorney General from issuing press releases or public disclosures regarding any matter relating to its litigation against Capital One Bank."

            In fact, in March 2005 when Capital One announced a proposal to buy Hibernia National Bank in (pre-Katrina) New Orleans, public records of state anti-predatory lending enforcement actions against Capital One were raised, regarding West Virginia and elsewhere. Associated Press on March 10, 2005 reported that

"Capital One's troubling practices were reflected most recently in Minnesota Attorney General Mike Hatch's lawsuit against the company. In the suit, filed in December, Hatch said Capital One's ads indicate that interest rates on its 'No Hassle' credit cards would remain at 4.99 percent. However, he says many consumers wind up paying higher rates, and those who miss payments or exceed credit limits could see rates in excess of 25 percent. Capital One said it continues to work with Hatch's office."

            A Louisiana business publication noted Capital One's same-day public relations action:

"Spokeswoman Tatiana Stead emailed an additional statement this afternoon in response to the Minnesota lawsuit against the company: 'Capital One has cooperated fully with the Attorney General’s investigation, and believes it has acted properly and in full compliance with the law. Capital One regrets that the Attorney General has chosen to proceed with this lawsuit, but intends to continue to work with the Attorney General’s office to address the issues raised.'"

            Whether because of this "work with Hatch's office" or not, comment has not been able to be obtained from office since Klane's nomination. The West Virginia attorney general's office, however, has indicated shock that an executive vice president from Capital One would be nominated to a seat on the Federal Reserve Board, which along with setting interest rates is charged with consumer protection.  From another state, a regulator explicitly concerned about retaliation called this a nomination of a fox to serve as a hen-house's overseer.

            Mr. Klane involvement with Capital One has extended beyond high-rate credit cards. He was a point-name when Capital One in 2005 bought the subprime mortgage lender eSmartloan. See, e.g., Card Line of Dec. 17, 2004.

   A review of the last publicly-available Home Mortgage Disclosure Act (HMDA) data including eSmart;oan's information found 144 super high cost loans subject to the Fed-implemented Home Ownership and Equity Protection Act -- loans at rates more than eight percent higher than prime -- and  2193 loans over the Fed-defined subprime rate spread, of three percent over prime.  While a purpose of HMDA is to allow for fair lending assessment by including racial and ethnic data, these eSmart (now Capital One) subprime loans were all were reported, as to race, "Information Not Provided." 

    The same might be said of the announcement and reporting of Mr. Klane's nomination: relThe seriousness of Senators' and the financial press' recently claimed concern about the subprime lending crisis will be tested during the consideration of Mr. Klane's qualifications for serving on the Federal Reserve Board.

* * *

  The Fed's chairman Ben Bernanke, in some places described as finally taking predatory lending seriously, was in fact dismissive in his May 17 Chicago Fed speech. ''We must be careful not to inadvertently suppress responsible lending or eliminate refinancing opportunities for subprime borrowers,'' he said, adding that the Fed -- or he -- sees ''no serious broader spillover.''

      As we predicted last week, and will cover going forward, the predatory lending industry is spilling over into the Federal Reserve Board...

            Meanwhile, the Bank of New York, enabler of predatory lenders, has been asked by the Federal Reserve about the scope of its subprime support, in response to ICP Fair Finance Watch's challenge the BONY - Mellon merger application. BONY responded, a month after the request -- and redacted even the number of subprime lenders it helps. Inner City Press has contested the redactions. We'll see.

May 14, 2007

   Who will fill the two empty seats at the Fed? According to Dow Jones -- on which Murdoch's News Corp has bid -- under consideration is one Larry Klane, Capital One Financial Corp.'s president of global financial services since 2000 and previously worked at Deutsche Bank. Bad combo -- Capital One has been challenged by state attorneys general for credit card shenanigans, and Deutsche Bank, beyond its enabling and now direct role in predatory lending, last week admitted to its long-concealed role for the recently expired dictator Turkmenbashi. What are Mr. Klane's views on these matters, both of which have been and will be raised to the Fed? Would Klane recuse himself?

May 7, 2007

            The Fed says it doesn't know what it can do under HOEPA, it doesn't know the extent of its jurisdiction. It never had such doubts when it allowed banks to get into securities, and then outright broke the Glass Steagall Act to benefit Citibank. The Fed only gets cautious when it's about consumers...

April 30, 2007

  Look who's jumping in -- Edward Gramlich, Federal Reserve governor from 1997 to 2005 now identifies himself as author of the forthcoming book "Subprime Mortgages: America's Latest Boom and Bust." This in a Knight Ridder article that reports that "at least 21 non-bank lenders have filed for bankruptcy protection or shut down since early last year. And the stocks of investment banks with large subprime holdings, such as Merrill Lynch and HSBC, are taking a hit as mortgage defaults and foreclosures climb." Uh, HSBC is hardly an "investment" bank. And HSBC was the largest subprime lender in the U.S. in 2006. The article also ran as a correction: "A story on problems in the subprime mortgage market suggested that First Franklin Financial Corp. was not subject to federal regulation. Before its recent sale to Merrill Lynch, it belonged to National City, which as a nationally chartered bank was regulated by the Office of the Comptroller of the Currency." Who would have an interest in pointing this error out?

April 23, 2007

            From the Federal Reserve Bank of NY, Inner City Press on April 21 received a copy of Bank of New York's heavily redacted application to acquire Mellon. BONY revised its still-too-extensive redactions to its application on April 16; ICP has a right to comment on this material.  ICP contends that this proposed combination would be anti-competitive. BONY apparently disagreed, but the bases of its argument are still being hidden, with entire pages of its antitrust memo blacked-out. BONY repeatedly cites the case Inner City Press v. FRB, then redacts even portions of its argument. ICP has contested these redactions and withholdings, and requested an extension of the comment period until the information to which ICP and the public have a right is released.

April 16, 2007

Federal Reserve chairman Ben Bernanke spoke on Wednesday, April 11 at New York University, intoning that "market-based regulation has proven an effective supplement to (or substitute for) conventional command-and-control approaches." On the other hand, we're told that at the Gridiron Club event on the last day of March, Bernanke yawned and took his leave while Dick Cheney was speaking...

April 9, 2007

In a study of the just-obtained 2006 mortgage lending data, ICP & Fair Finance Watch have identified disparities by race and ethnicity in the higher-cost lending of some of the nation's largest banks. 2006 is the third year in which the data distinguishes which loans are higher cost, over the federally-defined rate spread of three percent over the yield on Treasury securities of comparable duration on first lien loans, five percent on subordinate liens. Among other findings, Wells Fargo, 19.23% of whose 2006 mortgage were subprime, denied the applications of African Americans 1.72 times more frequently than whites, while denying those of Latinos 1.57 times more frequently than whites. Wells Fargo in 2006 made 889 super high-cost HOEPA loans.

  Wells Fargo's response was to hide behind the Federal Reserve. "The Federal Reserve has repeatedly emphasized that the limited data analyzed in the report cannot support a conclusion that lending practices are discriminatory," a spokesman for Wells Fargo said.  "Banks Prone to Sell Minorities Pricy Loans," Reuters / Washington Post

The Federal Reserve has also said that

”black and Hispanic borrowers taken together are much more likely than non-Hispanic white borrowers to obtain credit from institutions that report a higher incidence of higher-priced loans. On the one hand, this pattern may be benign and reflect a sorting of individuals into different market segments by their credit characteristics. On the other hand, it may be symptomatic of a more serious issue. Lenders that report a lower incidence of higher-priced products may be either less willing or less able to serve minority neighborhoods. More troubling, these patterns may stem, at least in part, from borrowers being steered to lenders or to loans that offer higher prices than the credit characteristics of these borrowers warrant. Reaching accurate determinations among these alternative possible outcomes is one goal of the supervision system."

   What the Federal Reserve, which missed the foreseeable crisis in the subprime lending industry, hasn't yet disclosed is that these disparities are most stark at the largest conglomerate in the country, Citigroup, including in its headquarters city's lowest-income borough.  

 Where the rubber will meet the road will be in how the Federal Reserve and other agencies act on specific disparities at specific lenders, including as these are formally raised to them in timely comments on merger applications, Fair Finance Watch concludes.

April 2, 2007

  Ben Bernanke and the CRA: Narrow views. Last week the Fed chairman said, "Some observers have suggested extending the CRA to nonbank providers, but this proposal neglects a fundamental premise of the CRA legislation - that banks incur special obligations in exchange for the advantages conferred by their charters, such as deposit insurance."  He also said, "To date, defining 'local community' for the purposes of CRA assessment has been manageable as most banks still lend in local communities where they have deposit-taking facilities or branches. However, if these trends continue, defining a 'local community' may become increasingly difficult, and the concept eventually may require reconsideration by regulators or even the Congress."

  So in Bernanke's view, the CRA must remain limited to its initial "premises," but to help the banks, the regulators or Congress should reconsider its initial focus. If it's Congress that considers it, they'd be free to change the premise too, and extend CRA to the non-bank providers...

March 26, 2007

            To the Dodd hearing last week, the Federal Reserve sent regulator Roger T. Cole, who finally acknowledged that "we could have done more sooner," while making much of the less than a handful of actions the Fed has taken, including its $70 million fine of Citigroup in 2004. But again, why was Citigroup not invited by Senator Dodd?  And as noted, the Federal Reserve bent logic to deem U.S. Bancorp's holding to be only 24.99 percent, in order to ignore New Century issues. Now the Fed is mumbling about the fundamental strength of the economy.

March 19, 2007

   Fed chairman Ben Bernanke has weighed in on whether, as with mortgages, the racial demographics of small business lending should be reported. And his answer is: no...

  On the hand, Inner City Press wishes to thank the Fed legal staffer who looked into whether Comerica will need to apply for any approvals to move its headquarters from Detroit to Dallas. Apparently, while such filings are required for national bank, they are not, for state banks which are members of the Federal Reserve System, under the Federal Reserve Act.

March 12, 2007

  Federal Reserve Governor Randall Kroszner said last week that his own research about larger banks suggests that as a whole U.S. banks have managed to avoid conflicts of interest that could arise from relationships such as links between boards of directors.

  Uh, heard of Citigroup's Sandy Weill and AT&T?

 March 5, 2007

  From a Ben Bernanke speech last week: " I have foreshadowed my conclusions." That the case with Federal Reserve reviews of protested merger in their approval orders, too...

From FinancialWire: "Bank of America Corp.'s $3.3 billion acquisition of Charles Schwab Corp.'s wealth management subsidiary U.S. Trust will take about three months longer to complete than originally estimated.  Charles Schwab expects to close the all-cash sale early in the third quarter instead of the early second-quarter target established late last year when the stock brokerage announced the deal with Bank of America."  So now there'd be no reason for the Fed to rush on BofA's application, including on 10% deposit cap issues....

February 26, 2007

  Outgoing Fed governor Susan Bies, signer of numerous FOIA denial letters, gave a speech last week about mortgage lending abuse: "There's a real transaction-based mentality in the industry today that you didn't have 20 years ago," she said. "To make a decision faster, and try to get the customer to say yes to you before they go and shop anywhere else, they'll waive terms." Now you tell us...

February 19, 2007

  The Fed on Friday spoke out against a devious CRA scam:

The Federal Reserve has received inquiries and complaints from recipients of direct mail solicitations that suggest there is a "Community Reinvestment Act (CRA) program" that entitles certain homeowners to cash grants or equity disbursements. Some of these solicitations may be read to indicate that the Federal Reserve endorses or supports the offers they contain. These solicitations appear to be a deceptive effort to encourage consumers to apply for a mortgage loan secured by the consumer's home. The Federal Reserve cautions the public about loan solicitations or other offers from lenders or mortgage brokers that offer consumers cash grants or equity disbursements as part of a "CRA Program." No such federal programs exist and these programs are not required by the CRA.

            Actually, under the Fed, virtually nothing is required by the CRA...

February 12, 2007

  Last week the Fed announced a new head for its Atlanta Reserve Bank. It's Dennis Lockhart, of whom the Fed said he "served as managing partner at the private equity firm Zephyr Management L.P., based in New York, and held various positions with Citicorp/Citibank, which is now Citigroup Inc."  Great....

            We can also report, only in skeletal form for now, that there has been a development in the litigation sparked by the Federal Reserve's withholding of information concerning Wachovia's subprime connections, and refusal to conduct a search of public records to make sure it is not withholding information that is otherwise publicly available. The Federal Reserve has agreed, at the federal District Court's suggestion, to reconsider whether it should have made the search (and in implication should conduct such searches in the future before issuing blanket denials of FOIA requests). The Fed has 20 working days to decide; we'll see.

February 5, 2007

  We're told of a paper by the Federal Reserve Bank of San Francisco, arguing that credit card small business lenders should be included in bank merger antitrust analysis, so that even more mergers could be approved, without any divestitures. Already, the Fed defined geographic markets so broadly that the only market in which it has denied a merger in years was in rural Georgia. The 10% deposit cap, then, is needed because the Fed refuses to effectively apply antitrust to the banking field...

January 29, 2007

            And now the payday lenders' trade association heaps praise on the Federal Reserve for lending its perceived legitimacy to the fringe financial industry, most recently in a report called "Defining and Detecting Predatory Lending," by Federal Reserve Bank of New York Research Officer Donald P. Morgan. CFSA quotes the Fed report that "the problem of high prices may reflect too few payday lenders, rather than too many."  Just what we need -- MORE payday lenders. The Fed has hit a new low.

            Inner City Press / Fair Finance Watch has filed with the Federal Reserve a timely challenge to  Bank of America's application to acquire U.S. Trust, click here for Charlotte Observer article. Now what will the Fed do? We'll see.

January 14, 2007

            The arrogance of PNC, which has proposed to buy Baltimore-based Mercantile, is striking. In response to the timely challenge ICP Fair Finance Watch filed with the Federal Reserve under a Community Reinvestment Act, PNC's "chief regulatory officer," John Wixted, just by a coincidence a former Federal Reserve official, responded as tersely and conclusorily as possible. The Federal Reserve asked such questions as, describe PNC's plans to merge Mercantile's 11 banks into PNC, and describe the due diligence performed -- a foreseeable questions, since as noted in the protest, Mercantile negligently leaked many consumers' personal information. PNC answered both: "PNC's response to this item is contained in the Confidential Supplement," and didn't send this portion to ICP Fair Finance Watch. Finally the Fed asked questions about fair lending, in response to which PNC writes that "In order to meet this requirement, PNC current intends to [   ]," with four lines then whited-out and withheld. The Federal Reserve is required to review the propriety of these absurd proposed withholdings. But PNC's secrecy and arrogance, along with its disparate lending record, bode badly for communities. Developing...

January 8, 2007

            On PNC - Mercantile, the Federal Reserve Bank of Cleveland has confirmed receipt of the timely protest of Fair Finance Watch. We'll see.

January 1, 2007

 The Federal Reserve set December 26 as the expiration of its comment period of the $6 billion proposed acquisition of Baltimore-based Mercantile by Riggs-heir PNC. As Fair Finance Watch has had concerns about both institutions, a comment was quickly prepared. When submitted by email, auto-responders came back from both Cleveland and DC: "out of office." But if the past is any guide, if the absurd deadline had been missed, the Fed would stand on "principle" and deem the comment untimely and not to be considered. In this case, it's timely, including that in the most recent year for which HMDA data is publicly available, 2005, PNC Bank in the Washington DC MSA, where it bought Riggs, denied the conventional home purchase mortgage applications of African Americans 3.78 times more frequently than whites. In Pittsburgh, PNC's headquarters, PNC Bank in 2005 denied the conventional home purchase mortgage applications of African Americans twice as frequently than whites. We're waiting for PNC's response.

December 25, 2006

  The Federal Reserve makes announcements it doesn't want you to understand. For example last week it announced that it had terminated an enforcement action against Citigroup. But it didn't say what the enforcement action had been about, only the date on which it was entered. From you, only through research, you find "the Written Agreement follows a special review of transactions involving Citigroup and its subsidiaries and the Enron Corporation, Houston, Texas. The Written Agreement requires Citigroup on its own behalf and on behalf of its subsidiaries to continue to strengthen risk-management practices, particularly those associated with complex structured-finance transactions."

December 18, 2006

  In the UK, "there has been a lot of fallout following the Financial Services Authority's statement that many brokers' sub-prime mortgage advertising is misleading clients... More than 200 brokers have been forced to withdraw or amend misleading sub-prime advertising."

            Why doesn't the US Federal Reserve work on these issues, with even half the energy and independence?

December 4, 2006

  Last week the Federal Reserve put on its Thrift Advisory Counsel the CEO of the nation's largest savings bank, Washington Mutual. Kerry Killinger is added to a group including representatives from American Express and ING. What is the purpose of the Thrift Advisory Counsel? If it's to get a view of savings (as opposed to commercial) banking views, why put on an European insurer like ING?

November 27, 2006

   In the hoopla about Fed chairman Bernanke agreeing to ride shotgun with Hank Paulson on his trip to pressure Beijing, something missed was the Federal Reserve's duty to scrutinize the China moves of U.S.-based holding companies like BofA and Citigroup.  For these, the Fed is home country supervisor. And yet there's no public scrutiny, and little at the Fed, of the deals these banks are making. Citi buying into Guangdong will have no comment period. The Fed will issue no order describing what it considered. Citi may give notice along after the fact. Will Ben Bernanke ask? We'll see.

November 20, 2006

            Of the Federal Reserve System, what can be said? They're getting worse and worse, more open in their contempt for public comment. A recent example is the Federal Reserve Bank of New York's decision to disregard detailed comments about HSBC's predatory lending and alleged money laundering, for being a few days late. In fact, there was no way to know what HSBC's application to the Fed was about, until a copy of HSBC's related application to another agency came in. Meanwhile the Federal Reserve Bank of Atlanta tried to demand money for copy of the Regions - AmSouth application. And as set forth below, when the Fed does get paid, for HMDA data on disk, it takes more than a month to get it.

            We've held off but now it must be said: the Federal Reserve is one of the worst order-processors in the United States. Last week when Inner City Press ordered up the HMDA data, it took the Fed weeks to send. This year, they sent the wrong year's data, then apologized, saying they'd Fed Ex the correct data the next day at their expense. This never happened, not even close.

Maybe *this* is why the Fed is so reluctant to criticize abuses of consumers by banks -- the Fed itself misserves consumers, with one of the few products it sells...

November 13, 2006

            In Washington, the (CRA) talk is of oversight hearings, more likely in the House than Senate, on the agencies' non-enforcement of the Community Reinvestment Act and consumer protections. Examples given include last week's Federal Reserve approval of Capital One buying North Fork, in which the Fed's order ignores the Cap One predatory lending issues including not only in timely comments to the Fed, but even Business Week, in its November 6 expose. The Fed's rubber-stamp approval of the Regions - AmSouth merger, despite the banks' records in the Katrina Zone, is exhibit number two.

            There is also the question of Dodd, Chris Dodd, and where he stands on consumer protection. He has spoken of credit cards, but less of insurance. In anti-predatory lending he has largest been unseen. Will Capital One, and the Fed's velvet glove treatment of Cap One's gouging of consumers, trigger some Dodd deeds? We'll see.

November 6, 2006

  For those following the delay on the Capital One - North Fork deal, Business Week of Nov. 6 explains some of the issues, including that "according to Cap One's regulatory filings, 30% of its credit card loans are subprime. Representatives of 32 credit counseling agencies contacted by BusinessWeek say that Cap One has long stood out for the number of cards it's willing to give to subprime borrowers." As Fair Finance Watch raised in its comments to the Fed, " Last year, West Virginia Attorney General Darrell V. McGraw Jr. filed an action in state court seeking documents from Cap One related to its issuance of multiple cards, as well as other credit practices. Other than that, however, Cap One's practices do not appear to have drawn regulatory scrutiny. A spokesman for the Federal Reserve, Cap One's primary federal overseer, declined to comment about Cap One, but said that in general the regulator doesn't object to multiple cards."

  Increasingly typical, that the Fed would try to provide comfort to a predator...

October 30, 2006

  Fed governor Susan Bies last week at the agency's Consumer Advisory Board -- fewer than one half of whose members are consumer advocates -- promised those present that the Fed will "reconsider" its guidance on exotic mortgages, issued only last months. "We will go through a process to clarify exactly what the terms are, what the scope is," she said, adding that the Fed's lawyers "have heard from some of the folks ... Apparently we do need to make some technical corrections to make this more 'principle' based as opposed to 'detail' based." Sort of like the Fed's recent merger approval orders -- why get bogged down in the detail of lending disparities and even adverse CRA sub-ratings, when the Fed can recite generalities and then approve a merger? And the mysterious limbo of Capital One - North Fork continues...

October 23, 2006

            The Fed on Friday hauled off and approved Regions - AmSouth. Of CRA the Fed said:

"Several commenters expressed concern about the less-than-satisfactory ratings the bank received for its CRA performance in some of its assessment areas. The bank received an overall rating of 'needs to improve' in the Chattanooga multistate metropolitan area, and received 'low satisfactory' ratings under the lending test for Louisiana and the Augusta and Texarkana multistate metropolitan areas. In each of these assessment areas, examiners noted that there are a relatively high proportion of families below the poverty level and that these families may not qualify for residential real estate loans because of their lower capacity for debt repayment. Examiners indicated that these conditions may have hindered the bank's efforts to lend to LMI individuals in these assessment areas. The bank received higher ratings under the lending and other tests in other areas, and examiners concluded that the bank’s record of CRA performance during the review period, when viewed as whole, merited a rating of 'satisfactory.'"

            How nice, to explain away even adverse CRA sub-ratings. Meanwhile inquiring minds increasingly wonder what is up with Capital One - North Fork...

October 16, 2006

  Last week the Federal Reserve handed an approval to National City to buy Harbor Federal, noting "that on September 5, 2006, National City signed an agreement to sell its principal subsidiary that originates subprime mortgage loans, First Franklin Financial Corporation to Merrill Lynch & Co., and also announced its intention to sell to Merrill Lynch $5.6 billion of loans originated by First Franklin." Of course, the Fed won't be reviewing that transaction...

October 9, 2006

  Becoming evermore perfunctory, the Federal Reserve on September 19 asked Wachovia to "discuss the extent of any subprime loans in the World Savings Bank loan portfolio." Wachovia's Courtney D. Allison's misleading answer, dated September 25 but mailed only days later to Inner City Press, was received after the Fed had approved the merger, and it had been consummated...

  Similarly, in an email of September 26 to National City that was not cc-ed to Fair Finance Watch, the Fed has apparently asked questions about Harbor Florida Bankshares' appraisal company, with an eye toward allowing National City to continue in the business. Since the Fed in violation of its own rules on ex parte communications didn't send Inner City Press a copy of the questions it posed to National City, and Nat City's curt answer didn't repeat the questions, there's no way to know...

October 2, 2006

  The Federal Reserve's approval on Sept. 25 of Wachovia - Golden West reaches new loans. The Fed writes for example that ICP Fair Finance Watch

"also alleged that World Savings directs customers to low- or no-documentation loan products as a means to exaggerate the customer’s income and places the customers in loan products that exceed their ability to repay, which ultimately results in foreclosures. According to information provided by Wachovia and Golden West, World Savings requires low- or no-documentation on 90 percent of the loan applications it processes and uses the same underwriting standards for all applications."

  But ICP Fair Finance Watch pointed out that this absurd level of no- and low-doc lending results in forced sales of homes, not foreclosures. The Fed recites that ICP Fair Finance Watch

"expressed concern about Wachovia’s relationships with unaffiliated pawn shops and other nontraditional providers of financial services. As a general matter, the activities of the consumer finance businesses identified by the commenter are permissible, and the businesses are licensed by the states in which they operate when so required. Wachovia stated that it makes loans to these types of nontraditional providers under terms, circumstances, and due-diligence procedures that are more stringent than those it applies to other borrowers."

  But again the information was withheld. The Fed gives weight to

"more than 200 comments supporting the proposed transaction. These commenters stated that Wachovia and Golden West have been responsive to the needs of their communities through innovative mortgage products designed for LMI borrowers and have provided significant financial, technical, and personnel support for community development projects."

   None of these were sent to Inner City Press, despite its timely challenge to the deal.

September 25, 2006

  The Federal Reserve, which despite its own internal rules no longer sends commenters a copy of its letters to banks requesting additional information on protested application, does still suggest to banks that they send copies of their responses to the commenters. And so last week National City Corporation's terse answer to the Fed's September 8 questions -- which are not reproduced in Nat City's answer -- arrived, in connection with the challenge of Fair Finance Watch of Nat City's proposal to acquire Harbor Florida Bankshares. The response included Cincinnati foreclosure data, 2004 and 2005:

"For the year 2005, National City has sixty-seven (67) mortgage loan foreclosures in Hamilton County, Ohio with sixty-six (66) of those foreclosures being within the City of Cincinnati. Therefore, for 2004, the number of National City foreclosures in Hamilton County amounted to 1.11% of the total of National City's loans in that County, and 1.16% of the total number of National City loans in Cincinnati. For the year 2005, National City has eighty-nine (89) mortgage loan foreclosures in Hamilton County, Ohio with eighty-four (84) of those foreclosures being within the City of Cincinnati. Therefore, for 2005, the number of National City foreclosures in Hamilton County amounted to 1.21% of the total of National City's loans in that County, and 1.24% of the total number of National City loans in Cincinnati."

   As it is clear, the foreclosure trend is up... 

September 18, 2006

  From the Sept. 11 speech of the Boston Fed's Cathy Minehan to the National Association of Business Economists"

"In our estimation, the run-up in housing values over the past several years did not spur much of a bigger-than-expected increase in consumer spending - if anything, the response was a bit on the low side compared to the historical average. So we wonder about how large a spending effect one should expect to accompany a fall in housing prices, if that were to occur. Clearly mortgage equity withdrawals have been sizable during the housing 'boom,' but many of these withdrawals were used to reduce other forms of consumer debt and to make one-time improvements in the housing stock. Indeed, as a result, overall household balance sheets today continue to look fairly strong. That is not to say, however, that rising mortgage interest rates are not negatively affecting borrowers. It also does not mean that new types of mortgages won't contain more than a few nasty surprises. Of particular concern are sub-prime borrowers and perhaps some depository institutions specializing in subprime lending."

  Then why has there been virtually NO inquiry by the Fed into Regions Financial's subprime lending, which makes up seventy-some percent of all its mortgages to African Americans? And why is the Fed withholding virtually all antitrust information from Regions on AmSouth? The Fed continues hitting new lows...

September 11, 2006

  Welcome to the world of the lawless. Last week's Federal Reserve order on Credit Agricole, Boetie, et al., recites in footnote 12 that ICP Fair Finance Watch

"asserted that Boetie violated the BHC Act by acquiring the voting shares of Credit Agricole before submitting the proposal to the Board for approval. In addition, the commenter complained that Boetie and Credit Agricole violated the BHC Act through the acquisition of all the shares of Credit Lyonnais in 2003 without the Board’s prior approval for the acquisition of Credit Lyonnais’s nonbanking operations. The commenter asserted that the Board lacked authority to waive the BHC Act’s application filing requirements with respect to such transactions and inappropriately shielded such transactions from comment. As noted above, Boetie and Credit Agricole have operated the U.S. subsidiaries under the temporary authority granted by the Board under section 4(c)(9) of the BHC Act, which does not provide for public notice."

   So the Fed says it can grant temporary approvals to transactions without even telling the public... The next footnote, 13, is on money laundering, that FFW

"cited various news and congressional reports from 2003 through 2005 regarding allegations that ES Bank concealed assets and money laundering in connection with accounts held for the benefit of certain international individuals, including former Chilean President Augusto Pinochet."

   What a generous description, "international individuals."  And how kind the Fed is to Espiritu Santo Bank, of which FFW

" questioned the veracity of ES Bank’s reporting of no denials of home mortgage applications in 2001 and 2002 and generally alleged that the bank prescreened its home mortgage applications. Specifically, the commenter contended that ES Bank violated HMDA by not accurately reporting its home mortgage applications and violated the Equal Credit Opportunity Act (“ECOA”) (15 U.S.C. § 1691 et seq.) by not providing adverse action notices when required. ES Bank has represented that it reported no denials because it is a wholesale bank engaged primarily in international private banking and that its residential mortgages are generally extended as an accommodation to private banking customers where a mortgage loan approval would be expected. The commenter also questioned ES Bank’s characterization of loans generated by brokers as accommodation loans. Applicants represented that ES Bank began using two licensed mortgage brokers in 2001 in an effort to increase its loan portfolio during a period when internal referrals had slowed. Applicants also represented that ES Bank’s brokers referred a small number of mortgage loans to the bank in 2005."

    In footnote 16, the Fed doesn't even bother spelling correctly, writing that FFW

"alleged Credit Agricole and Credit Lyonnais are signatories to international human rights and environmental agreements and that the organizations have exhibited a lack of envirnonmental and human rights standards."

   Much care went into this Order, it's clear...

September 4, 2006

            Will the Federal Reserve take note, while it considers Wachovia's application to buy Golden West, of Money Marketing of August 31, reporting that Wachovia will specifically target the sub-prime and non-conforming home loan sector via intermediaries, adding to the commercial mortgage operation it is building. A spokesman says: "We will be looking at mortgages, sub- prime, non-conforming as well as consumer loans and credit cards." If only Wachovia were nearly as honest in the USA, or in the portions of its filings with the Fed that get provided to commenters like Fair Finance Watch...

August 28, 2006

            In the run-up to the Federal Reserve's spin of the 2005 Home Mortgage Disclosure Act data, Inner City Press can this week report on the Fed's partial Freedom of Information Act response to its request for all records concerning the Fed's list of lenders with disparate 2004 HMDA data. The Fed withheld "five linear feet of documents," and has so far sent only a fax of parts of a single document, the required mailed copy of which Inner City Press is awaiting in order to file its FOIA appeal. (The Fed is far behind in its FOIA responses, then because sending garbled faxes which do not comply with the regulation.) This particular fax, which the Fed's cover letter describes as "a description of the methodology used in generating the HMDA lenders list," is in fact a manual directed at the Fed's examination staff. It states that

"The purpose of the Federal Reserve's matched-pair analysis is to compute lender-specific racial or gender disparities in denial rates, high rate pricing incidences and average APR spreads for loans above the threshold controlling for other factors including, market, income and loan amount. Each minority (or female) is matched to as many non-minority (or male) applicants (or borrowers) as meet the matching criteria. The outcomes of the minority (female) is compared with the average outcome of the non-minority (males) matched to it. The difference is the individual minority's (female's) 'matched pair disparity.' The disparities of all matches minorities (females) are averaged by product area or for sub areas such as MSAs...

  "Optionally, the matched pair procedures can be used to test for 'steering' within an organization such as a holding company. The outcome variable is the selection of a particular subsidiary of an organization (say a subprime lender) over another (say a prime lender) and the analysis tests whether this choice is related to the race of gender controlling for other factors including, market, income and loan amount. The user needs to specify how to classify lenders into the 'subprime' and 'prime' groups."

            While Inner City Press will have more once it receives the required mailed version of this document, we now we note Citigroup's recent announcement that it will merge its subprime CitiFinancial into its mostly-prime CitiMortgage, thereby evading this "optional" steering analysis....

  On Regions - AmSouth, the sleazing has begun. Regions has provided Fair Finance Watch with a copy of a CRA submission, with the names of all groups it funds blacked out. Meanwhile Regions solicits letters of support from such groups. Separately, Regions writes to thank such groups, starting "Thank you for taking the time to write a letter of support for the application by Regions Financial Corporation to merge with AmSouth Bancorporation... We at Regions very much appreciate your positive attitude toward our organization."  But the identity of funded groups must be unmasked to weigh their testimony. Developing...

August 21, 2006

            The Federal Reserve has received, via Wachovia, a response from World Savings to comments FFW filed "with respect to World's Quick Qualifier (QQ) loan process."  The purported response states that under World's QQ, "the customer may specify his or her income without necessarily having to pull together the documentation traditionally associated with the mortgage loan application process."

            Yeah -- like a form W-2...

            The letter continues that "turning to the specific questions asked by FFW in its letter, we are glad to provide the following information. FFW first asked what percentage of World's loans are QQ loans. To date in 2006, approximately 94% of World's loan originations have been submitted as QQ loans... FFW questions why World would allow a loan applicant who can produce a W-2 for earned wages to apply on a QQ basis." Yes, FFW is asking that -- as the Federal Reserve should. Developing.... 

August 14, 2006

  Hitting a new low, the Federal Reserve on August 11 telephone Fair Finance Watch for the second time denying any extension of that day's expiration of the comment period on Wachovia's application to acquire Golden West. Then at 5:36 p.m. on August 11, the Federal Reserve faxed FFW documents responsive to its FOIA request of July 16, including various support letters that Wachovia solicited. A new low... 

August 7, 2006

   A specific indication of the Federal Reserve's lackadaisical approach to enforcing even the antitrust laws is to be found in Florida in the Punta Gorda market. As presented by the Sarasota Herald-Tribune in a July 31 report on Fair Finance Watch's opposition to Wachovia's application to acquire Golden West, the group also notes the bank will wind up with an 'anti-competitive' market share in Charlotte. As of Dec. 31, Wachovia's 11 branches held $763.8 million in deposits in Charlotte, a 22.17 percent market share. Adding World's single  office and $184 million in deposits in Punta Gorda would boost its market share to 27.51 percent.... Wachovia isn't even the largest bank in Charlotte County right now. Bank of America's seven branches held $775.9 million in deposits, a 22.52 percent market share, as of Dec. 31." Talk about duopoly... 

July 31, 2006

  The Fed's FOIA sleaze continues. Responding to Inner City Press' complaint last week that, after for years granting ICP a FOIA fee waiver, as all other bank regulatory agencies do, the Fed suddenly responded with a letter that fees are expected -- this in the midst of ICP's Wachovia FOIA litigation against the Fed, and the Fed having delayed six to eight months on ICP's subsequent FOIA requests.  Last week the Fed provided a slightly amended acknowledgement letter, not granting the always-previously-granted fee waiver, but rather stating:

This will acknowledge receipt of your letter dated 7/16/2006, and received by the Board on 7/17/2006, in which you request, pursuant to the [FOIA] records pertaining to the application by Wachovia Corporation to acquire Golden West and thereby indirectly acquire the voting shares of World Savings... unless a request for a fee waiver is granted, this letter also confirms our assumption that you will pay all fees incurred in the processing of your request. The Board makes every effort to fulfill requests in a timely manner; however, there may be delays in fulfilling complex requests or those that require consultation. Please feel free to contact the Board's FOIA Requester Service Center at (202) 452-3684 to obtain information about the status of your FOIA request. 

    Well, given how many of Inner City Press' FOIA requests have been delayed six to eight months, that newly provided phone number must be busy...

July 24, 2006

            Hitting yet another new low, the Federal Reserve last week after for years granting Inner City Press / Fair Finance Watch fees waivers under FOIA, tried to charge fees, even for processing requests. Substantively, ICP has contested the withholding of the exhibits Wachovia has unilaterally deemed "confidential," and continues to await the other records responsive to the July 16, 2006, FOIA request. The Board's response states that it "confirms our understanding that you will pay all fees incurred in the processing of your request." The FRB has granted ICP and its affiliates fee waivers for years. An observer, a court, even the Department of Justice, could easily surmise that the FRB's attempt to impose fees is no more than retaliation for having dared to challenge in the Federal District Court for the Southern District of New York the FRB's withholding of Wachovia's subprime lending information. Ever since that case was filed, the FRB has begun delaying up to eight months on FOIA requests, and now seeks to impose fees. We'll see.

July 17, 2006

  The Federal Reserve, which has spent many hours of legal work trying to withhold information about Wachovia's assistance to subprime lenders, now has before it an application by Wachovia to acquire Golden West and World Savings. Inner City Press / Fair Finance Watch has submitted a FOIA request which "includes a complete copy of the application, it also includes all other communications and records during the time frame that relate to the issues, including managerial issues, that the FRB must consider in connection with the application.  We specifically refer to Wachovia's engagement with subprime lenders, regarding which the Federal Reserve has previously withheld information from Inner City Press, giving rise to FOIA litigation, a partial chiding of the FRB by District Court Judge Cote, and the recently-heard appeal in the Second Circuit. We note as part of this request the arguments in the FRB reply brief in that case is that Wachovia's provision of a list of the subprime lenders it assists was "voluntary" because Wachovia submitted it early in the process. The FRB acknowledges that in cases "prior to Wachovia" SouthTrust, it asked for the names of subprime lenders assisted, but that Wachovia include this in its application, making it voluntary. That sleight of hand cannot legitimately be used to evade FOIA."

July 10, 2006

   Seven months ago, Inner City Press submitted to the Federal Reserve Board a Freedom of Information Act request, for records "regarding the Federal Reserve System having compiled a list of lenders with disparate 2004 Home Mortgage Disclosure Act data and transmitting such lists beyond the FRS."

            Under the Freedom of Information Act, the Fed is supposed to provide records within twenty business day.  But with a single letter six months ago, the Fed unilaterally extended its time to respond.  Now, as it prepares its required annual FOIA report to the Department of Justice, the Fed begrudgingly sends a second letter, which states that "approximately five linear feet of documents will be withheld from you... no reasonably segregable nonexempt information was found."

            An appeal will follow...  Also last week, Synovus' Columbus Bank & Trust along with CompuCredit were forced to pay $11 million in restitution to residents of New York State for failing to disclose activation fees of up to $179 on Aspire Visa cards. Inner City Press has raised Synovus' consumer abuse to the Federal Reserve a number of times in recent years. Now what will the Fed do?

July 3, 2006

            This now from the Fed, dated the 21st of June: "This is in response to your letter, dated and received by the Board's Freedom of Information office on October 3, 2005... In an October 20, 2005, telephone conversation with Ms. Alison Thro of the Board's Legal Division, you clarified..."

            Why then did it take EIGHT MONTHS to act on Inner City Press' clarified and narrowed request? And what will DOJ say?

Given the disparities in Citigroup's 2005 HMDA data, the Federal Reserve's wordless lifting of its 2004 cease-and-desist predatory lending order against CitiFinancial is shameful. So too was Citigroup's meeting with the Office of Management and Budget in June, to lobby about Basel II...

June 26, 2006

            In the Second Circuit Court of Appeals on June 22, thee Federal Reserve lawyers appeared, to defend the Fed's withholding despite Inner City Press' Freedom of Information Act request a list of subprime lenders assisted by Wachovia. Since the arguments on both sides involved whether the names on the list are "otherwise publicly available" in SEC documents, the Fed was asked who thought of checking the SEC database. Rather than acknowledge that the issue was raised in ICP's comments on the Wachovia - Southtrust merger, the Fed's lawyer claimed that the District Court judge in the subsequent FOIA case thought it up. But that wasn't true....

    Inner City Press has been informed that the Federal Reserve's long-time fair lending guru Robert Cook now works at and for Countrywide, which has the subprime unit Full Spectrum. When Inner City Press asked about anti-revolving door provisions, noting that even the OCC prohibits a bank's examiner from going to work for the bank for a year after leaving the OCC, it was noted that Mr. Cook recently attended a Federal Reserve meeting with and for Countrywide. That is to say, he appeared, quite literally, for Countrywide, which was and is a bank holding company regulated by the Fed...

June 19, 2006

            The Federal Reserve hits new lows daily. Last week we reported that the Fed has for months stopped responding to Freedom of Information Act requests, including a request Inner City Press filed months ago about the Fed's actions (or inaction) on disparities in the 2004 Home Mortgage Disclosure Act data.

            Now the Fed is turning a blind eye to glaring disparities in the 2005 data. For example, in its BB&T Order last week, the Fed ignores the issues raised about BB&T's refers-down to its subprime unit Lendmark. BB&T's response to Inner City Press / Fair Finance Watch's comments included the volume of loans referred up in 2005, but no such figure for referrals-down. Nor did the Fed request it. Despite the speechmaking about HMDA data, the Fed is hitting new lows daily.

            And this coming week, on June 22, the Fed will be in the Second Circuit Court of Appeals in New York, on the cross-appeals concerning the Fed's withholding of the names of subprime lenders assisted by Wachovia and SouthTrust. While the case has been pending, the Fed has stopped responding to ICP's FOIA requests, and has stopped asking application for the names of the subprime lenders they assist. Like we said, the Fed is hitting new lows daily...

June 12, 2006

            From Inner City Press / Fair Finance Watch's just-filed comment to the Federal Reserve just after receiving from the FDIC a copy of HSBC's related tax Refund Anticipation Loan (RAL) application, which ICP timely requested: Note for the record on this request that ICP made its FOIA request for the application to the FDIC and not the FRB because the FRB has allowed fully 22 FOIA request from ICP to remaining pending, some for over eight months -- ICP recently waived and limited some, to get at least some documents -- in the interim, ICP directs its FOIA request to other, non-FRS agencies -- for shame...

June 5, 2006

  Among the slipperier of the Fed's arguments in its reply brief in the ICP v. FRB Second Circuit FOIA case is that Wachovia's provision of a list of the subprime lenders it assists was "voluntary" because Wachovia submitted it early in the process. The Fed acknowledges that in cases "prior to Wachovia" SouthTrust, it asked for the names of subprime lenders assisted, but that Wachovia include this in its application, making it voluntary. What's worse, the Fed since the District Court decision no longer asks for any names. So secretive it has stopped regulating (at least on this point).

            The Fed also complains that neither it nor applicants should have to make sure that withheld information is not otherwise publicly available, that it should fall to requesters to show that names they have not seen are, in fact, publicly available. Too much burden for a multi-billion dollar bank to certify that the information it is trying to withhold is not contained in its own SEC filings...

May 29, 2006

  In the Fed's Santander-Sovereign rubber stamp last week, this, from footnote 30: ICP "expressed concerns about Santander’s acquisition of Island Finance Puerto Rico Inc. ("Island Finance"), an entity engaged in subprime lending. As a general matter, the activities of the consumer finance business identified by the commenter are permissible and the commenter did not provide evidence that Santander or Island Finance had originated, purchased, or securitized "predatory" loans or otherwise engaged in abusive lending practices."  Hmm -- what ICP raised what Island Finance's practice of charging 25% on consumer loans, targeted at Latinos, without even checking people's credit histories. If that's not predatory, what is?

  The Fed also recites that ICP "expressed concern about Santander’s ability to share information for purposes of complying with applicable U.S. anti-money laundering laws." The reference here is to the fact that Santander refused to disclose, even to its own US affiliates, the owner of accounts into which money was wired (as described in Senate's Riggs report, the owner was the dictator of Equatorial Guinea). So how can the Fed go on to "note[] that Santander has committed to make available to the Board information on the operations of Santander and any of its affiliates that the Board deems necessary to determine and enforce compliance with applicable laws"?  Does that mean that the Fed endorses the type of no-name offshore wiring (that is, money laundering) as is described in the Senate's Riggs report? We'll see...  

May 22, 2006

A deafening no-comment, and lack of action by the Fed  -- following the Wall Street Journal's May 11 article on the continuing investigation into the billions looted from Nigeria by ex-dictator Sani Abacha, which named as a conduit for Abacha's Transnational Bank's nostro accounts Citigroup and only one other institution (Deutsche Bank), nothing said by Citigroup, or the Fed...

  While the Federal Reserve fights on appeal to keep confidential the list it has of subprime lenders helped by Wachovia, on March 24, 2006, subprime lender NovaStar simultaneously announced the purchase of a $940 million pool of payment option adjustable rate mortgages, and plans to structure its first securitization of the year as an on-balance sheet transaction. The $1.35 billion on-balance sheet deal closed April 28, led by Wachovia Securities -- enabler of predatory lending, as is coming to a head in the FOIA litigation now in the 2d Circuit Court of Appeals in New York...

 A non-bank deal we see as significant was last week's announcement by Deutsche Bank that it intends to acquire California-based subprime mortgage lender Chapel Funding LLC. The idea is to cut out the middle man. The head of Deutsche Bank's Global Markets Americas unit, Phil Weingord, said that "the integration of a mortgage originator will provide significant competitive advantages, such as access to a steady source of product." Deutsche Bank is not only a trustee on subprime loans, it is also a securitizer. It has begun subprime lending in the United Kingdom, and last December bought a mortgage lender in Mexico, to securitize. And what is the Federal Reserve doing to review these moves? Nothing, that we can see...

  And here's a development -- on Credit Agricole SAS Rue La Boetie, on which ICP commented long ago, finally the Fed has asked questions, about the glaring lack of denials in the lending of Espiritu Santo Bank. Credit Agricole (under a Caylon cover letter) tried to claim that the borrowers are "mostly" individuals with a Private Banking relationship with ESB. But in one of the years reviewed, non-clients were 75% of the borrowers. Something's fishy (and not only on this) -- we'll see what the Fed does.

May 15, 2006

  For the attention of the Federal Reserve, which has given its rubber stamp approval to the anti-money laundering regime in Japan, despite scandal after scandal, including that involving Citigroup -- Regarding money laundering in Japan: "Banker off hook in loan shark money-laundering," blared The Japan Times on March 23. The Yomiuri Shimbun chimed in with "Court ruling could make Japan a money-laundering haven", questioning the Tokyo District Court ruling that experts say undermines claims that Japan is making progress on due diligence compliance.  The case behind the headlines involved Susumu Kajiyama - the "loan-shark king" of the Yamaguchi-gumi underworld group - hiding $659.47 million raised from loaning money at illegally high interest rates.  The funds were transferred to accounts opened at Credit Suisse in May 2003, in transactions completed by Atsushi Doden, an employee of the Hong Kong branch. A report on the transfer led to Kajiyama being sentenced to 61/2 years in prison in November. The judge ruled on March 22 that "reasonable doubt" existed that Doden knew the money was profits from criminal activities and that testimony from another gangster about a conspiracy with Doden was not trustworthy.  Observers are quoted in the SCMN that while "suspicious transaction reports" are being filed, but that those identified by Japanese watchdog Financial Intelligence Unit as requiring further investigation by the National Police Agency cannot all be examined adequately. In 2005, there were 98,935 STRs filed by financial institutions in Japan, of which 66,812 were referred to the police for investigation.  In 2003, the number of STRs stood at 43,768 and, in 1998, just 13 such reports showed up on the authorities' radar. The FIU still employs only about 20 staff, including financial intelligence analysts examining suspicious transactions.  Japan's anti-money laundering regime is covered by The Law Concerning Confirmation of Client Identity of Fiscal Institutions, The Organized Crime Punishment Law and The Foreign Exchange and Foreign Trade Law. These laws have remained substantially unchanged over the past two years, despite the scandals, including the one involving Citigroup.  Good place to launder -- will the Federal Reserve reconsider its FBSEA rubber stamp? We'll see.

  Inner City Press / Fair Finance Watch has filed its reply brief in the ongoing case about the Federal Reserve's withholding of information about the subprime lenders enabled by Wachovia. The Fed's arguments have been shifting; we'll see what they say at oral argument next month. Developing...

May 8, 2006

  In a May 3 letter faxed to Inner City Press, the Federal Reserve states that "under the terms of the proposal, JPMC is to sell its corporate trust assets to BNY, and BNY is to sell its retail and middle-market banking business to JPMC... prior approval of the Federal Reserve System is not required to effect the proposal. The FRS therefore does not expect to receive any application in connection with the proposed transactions."

  This is the same Federal Reserve which just found Bank of New York money laundering for the second time...  And what will the Fed do on this -- on May 2, BofA announced a proposal to acquire a $2.2 billion stake in Banco Itau through an asset-swap, which would involve Itau taking control of BofA's BankBoston unit in Brazil, which has about 140 offices and $9 billion of assets under management. Itau has also been given exclusive rights to buy subsidiaries of BankBoston in Chile and Uruguay. For a U.S.-based holding company to buy such a stake in a bank in another country -- does the Fed even review these acquisitions?

May 1, 2006

  Here's a variation on the revolving door -- the repeat settlement. Bank of New York, which the Federal Reserve hit with a $38 million money laundering fine in 2000 (for having moved $7 billion in hot Russian money), has now settled again, without even paying a fine. The Fed and the New York Banking Department have slapped Bank of New York on its BONY wrist for  new deficiencies in the bank's money laundering controls, giving it 60 days to comply with yet another order.And if it doesn't?  Well, it can just settle again. This will be raised, and reviewed, in connection with JPMorgan Chase's application[s] to acquire 338 (presumably money laundering) branches from BONY...

April 24, 2006

  The Federal Reserve has let AmSouth off the hook, releasing it from anti-money laundering scrutiny. We'll see how that works. AmSouth is a lender which refused to provide it mortgage data in analyzable form, and the Fed did nothing about it. Meanwhile at the Citigroup annual shareholders' meeting on April 18, CEO Chuck Prince said that if the Fed has removed the block on significant expansions, Citi must be good.  Hmm...

April 17, 2006

            The Fed continues contorting its bank supervision in order to keep the public in the dark. We now have an April 13 response from Santander (and Sovereign, apparently) to questions posed by the Federal Reserve. The first question is about Sovereign's connections with "alternative financial providers" such as "pawn shops, check cashers, or money service businesses." Santander admits that Sovereign has such connections, specifically confirming exhibits submitted by ICP about Century Pawnbroker and Cash Advance System, and implying there are more but leaving these unnamed.  The Fed, of course, is striving not to ask for names, since a Federal court has said these can't be withheld.

Click here to view Inner City Press / Fair Finance Watch's challenge to JPMorgan Chase's proposal to buy 338 branches from Bank of New York (and to close at least 50 of the branches)....

April 10, 2006

     Last week the Federal Reserve Board filed a 59-page brief in the Second Circuit Court of Appeals, continuing it defend its withholding of information about assistance to subprime lenders provided by banks -- in this case, Wachovia and its SouthTrust. The Fed continues to argue that it can withhold the names of subprime lenders with which an applicant bank does business, even if these business connections and names are required to be public in SEC filings, as long as the requester doesn't read the Board's mind and name the precise names, without having seen them. Earlier the Fed had argued that it should be entitled to withhold names that must be public because most requesters don't have access to professional searches of public records like Lexis, and free searches like Edgar are unlikely to dig up the connections.  The Fed has become a defender of questionable subprime lenders and the banks which enable them -- in fact, during the pendency of this case, and now the Fed's appeal, the Fed has stopped asking applicants to provide the names of subprime lenders they assist, but rather only their "policies."  This shows that, in order to protect and coddle banks, the Fed will even forego information that it previously made clear it needed, in order to appropriately regulate. For shame...

            Amazing too that the Federal Reserve System last week gave Citigroup the gift of saying, "go forth for large acquisitions," just as Citigroup got sued for insider trading by the Australian regulator, and while the Fed already had Citigroup's 2005 mortgage lending data, which is even more disparate than in 2004.

            Inner City Press / Fair Finance Watch has just released a study of the new 2005 Home Mortgage Disclosure Act data, click here for more.

April 3, 2006

  The Federal Reserve approval order last week approval to BB&T - Main Street Bank noted that Inner City Press / Fair Finance Watch

  "expressed concern about referrals of loan applicants to Lendmark Financial Services ('LFS'), a nonbank subsidiary of BB&Tthat makes subprime loans. BB&T has represented that it might refer to LFS applications denied by a BB&T subsidiary bank that do not meet the bank's underwriting guidelines. Before making a referral, however, these applications undergo an internal second-review procedure. In addition, BB&T notes that LFS has a policy to refer applicants who meet the Freddie Mac underwriting guidelines to BB&T's subsidiary banks."

   But BB&T's referrals up and down do not use the same standard. On fringe finance the Fed says that ICP

"expressed concern about BB&T's relationships with unaffiliated pawn shops and other nontraditional providers of financial services. As a general matter, the activities of the consumer finance businesses identified by the commenter are permissible, and the businesses are licensed by the states where they operate. BB&T has stated that it does not focus on marketing credit services to such nontraditional providers and that it makes loans to those firms
under the same terms, circumstances, and due diligence procedures applicable to BB&T's other small business borrowers."

 BB&T admitted in its responses into the record relationships with 45 payday and other fringe financiers. BB&T is growing in subprime -- as ICP and then the Fed noted, in its order

"A commenter asserted that the Board should, in the context of the current proposal, review BB&T's recently announced plans to acquire the assets of FSB Financial Ltd. ("FSB"), Arlington, Texas, a nonbanking company that purchasesautomobile-loan portfolios. The FSB acquisition is not  related to the current proposal. Moreover, if the FSB acquisition is consummated under authority of section 4(k) of the BHC Act, the acquisition would not  require prior approval of the Federal Reserve System. BB&T would require prior Federal Reserve System approval if the acquisition were proposed under sections 4(c)(8) and 4(j) of the BHC Act, and the transaction would be reviewed in light of the requirements and standards discussed above."

  Thanks to the GLB Act, subprime lenders can be acquired with no prior review by the Federal Reserve (which is at the same time fighting for greater regulatory rights with regard to Industrial Loan Companies, for example the ILC proposed be Wal-Mart). ICP/Fair Finance Watch will be continuing its watchdogging of BB&T and its growing (and murky) involvements in subprime lending.

March 27, 2006

  The Federal Reserve has now asked about Santander's acquisition of the subprime lender Island Finance from Wells Fargo, seeking confirmation that Santander "intends to file a post-transaction notice under section 225.87 of Regulation Y" and asking generically for information on Santander's due diligence on Island. Santander responds that it will file by March 29. Why let a company buy a controversial subprime lender and only "notify" the Fed of the acquisition a month after it is consummated?

  Meanwhile in response to Federal Reserve questions, BB&T has disclosed that it has made at least 45 loans to subprime lenders, including to pawn shops, rent to own businesses and even to a "pay day loan provider"...

  Speaking March 20 at the Economic Club of New York, new Fed chairman Ben Bernanke began with advice from his daddy back in South Carolina: "if you ever get the opportunity to keep your mouth shut, take advantage of it."

    But United States anti-money laundering, or at least FinCEN, has devolved into a revolving door. Two months after Bill Fox cashed out to Bank of America, now FinCEN's William D. Langford jumps to JP Morgan Chase. “I have an absolutely incredible opportunity with an incredible institution – it’s that simple,” Langford said in a telephone interview. Again - if the Treasury Department's OCC has adopted anti-revolving door safeguards in the wake of the Riggs Bank scandal, why hasn't FinCEN?

March 20, 2006

   Now the Federal Reserve doesn't care if an investment for which it gave Community Reinvestment Act credit turns out to be fraudulent and to benefit not a single low or moderate income person. In its M&I - Gold Bank order last week, the Fed said that Inner City Press / Fair Finance Watch

"criticized Gold Bank's investment-performance record and investment rating because of credit Gold Bank received in its 2005 CRA Evaluation from the Kansas City Reserve Bank for making an investment in multifamily housing revenue bonds that were ultimately intended to benefit LMI residents. The Board has consulted with the Kansas City Reserve Bank on this matter. Through no fault of Gold Bank, the bonds were called and no multifamily housing was constructed. Gold Banc made various, timely public disclosures regarding the impairment of the bonds"...

            That sure is friendly to Gold Bank. As the old saw has it, when something sounds too good to be true, it's usually fraudulent. In this case, the bond Gold Bank bought had a 30% return. ICP has also been told, by a knowledgeable source, that Gold Bank's management knew of the problems with the bonds well before it told the Fed. And in any event, the Fed never amended the CRA credit it gave, for an investment that did not benefit a single low or moderate income person.

   On mortgage lending, the Fed in its M&I - Trustcorp order said that ICP commented, "based on 2004 HMDA data, M&I FSB imposed higher-cost loans to Latinos as compared to nonminority borrowers in Missouri. M&I FSB has no assessment areas in Missouri." But M&I FSB does M&I's subprime lending all over the country, and is an insured financial institution. So now, according to the Fed, it can ignore subprime affiliates not only if they are mortgage companies, but even if they're insured financial institutions, as long as they keep their headquarters (and limited assessment areas) away from the merger zone. By this logic, banks that are affiliated should trade lending and reporting such that all problematic subprime lending is done by the affiliated headquarters out-of-market.  Is this how the Fed is assessing and acting on the economy?

Question: why didn't the Fed include Santander in its March 17 cease-and-desist orders against three (other) Puerto Rico banks which had to restate their earnings? Could it be because Santander has a contested application pending, and a cease-and-desist order would only add fuel to the fire?

March 13, 2006

   The U.S. Federal Reserve, despite its talk about anti-money laundering and fair lending, is even more committed to doling out approvals to any proposed merger or acquisition. On fair lending, the Fed last week approved an application by Whitney to buy 1st National, reciting that Inner City Press / Fair Finance Watch
"alleged, based on 2004 HMDA data, that Whitney Bank and 1st Bank disproportionately denied applications for HMDA-reportable loans by minority applicants in several Metropolitan Statistical Areas... Although the HMDA data might reflect certain disparities in the rates of loan applications, originations, denials, or pricing among members of different racial or ethnic groups in certain local areas, they provide an insufficient basis by themselves on which to conclude whether or not
Whitney Bank or 1st Bank is excluding or imposing higher credit costs on any racial or ethnic group on a prohibited basis."

   The "certain disparities" alluded to by the Fed includes these, identified to the Fed by ICP: In the New Orleans MSA in 2004, Whitney National Bank denied the conventional home purchase applications of African Americans fully 3.53 times more frequently than whites. These disparities at Whitney extend into each of its other footprint states: In Mississippi, in the Gulfport - Biloxi MSA, Whitney National Bank in 2004 denied the refinance loan applications of African Americans 5.48 times more frequently than whites. In Alabama, in the Mobile MSA, Whitney National Bank in 2004 denied the conventional home purchase applications of African Americans 3.22 times more frequently than whites.The Fed's approval order also notes that ICP

"expressed concern about Whitney Bank's relationship with a rent-to-own company, which is an unaffiliated, nontraditional provider of financial services. As a general matter, the activities of this type of business are permissible, and such businesses are licensed by the states where
they operate. Whitney Bank has implemented a policy for its commercial credit facilities to finance companies or other consumer lenders to fund consumer loans. This policy provides for an evaluation of the practices of such borrowers to identify any potentially predatory lending practices and for ongoing monitoring and management of relationships with such borrowers."

   But it's not at all clear in the record what practices or safeguards Whitney has -- and in previous cases, the Fed has tried to withhold such information (leading to a brief ICP filed last week in the Second Circuit Court of Appeals in the ongoing ICP v. FRB Freedom of Information Act case about Wachovia's enabling of predatory lenders).

  Also last week, In the face of public reports of Bank Hapoalim's involvement in ongoing money laundering investigations, the Fed gave Bank Hapoalim an approval.  The Fed's order noted the comments of ICP Fair Finance Watch that

"expressed concern about the proposal based on news reports of investigations by Israeli authorities into allegations of money laundering at Bank Hapoalim. As a matter of practice and policy, the Board generally has not tied consideration of a proposal to the scheduling or completion of an investigation if, as in this case, the applicant or notificant and reviewed reports of examination from the appropriate federal and state supervisors of the U.S. operations of Bank Hapoalim that assessed its managerial resources. Based on all the facts of record, the Board has concluded that considerations relating to the financial and \managerial resources of Notificants are consistent with approval."

   So the Fed's policy is to ignore active investigations? And to ignore reports of its sister agency, the State Department? The Fed's Hapoalim order says that ICP/FFW

"expressed concern about Israel's anti-money laundering policies and procedures [but] in June
2002, the FATF recognized that Israel had addressed the deficiencies identified in its 2000 report. FinCEN withdrew its advisory in July 2002, noting that Israelhas in place a counter-money laundering system that generally meets international standards." FinCEN Advisory Withdrawal Issue 17A."

  But the U.S. State Department's more recent 2006 report, also released last week, states that in Israel, "there is a continuing need for more effective bank supervision and proactive investigations of money laundering associated with criminal activity, especially on the part of organized crime figures and syndicates." Oh but don't let that get in the way of a merger...

March 6, 2006

  At Howard University on March 3, the exiting Roger Ferguson played econo-nerd to a generally befuddled audience, saying for example, in answer to a question read by Mr. Diallo, "You know that an economist will predict either the direction or the timing or never both," and musing about housing costs in Australia. One was left wondering why there are never any dissents, on the Federal Reserve Board… Meanwhile back in the real world, in a response just filed with the Federal Reserve, BB&T among other things claims that the questions that the Fed has asked other banks about due diligence conducted before lending to pawn shops and payday lenders are "unreasonable and overbroad." But the Fed has asked NC-based Wachovia exactly these questions, and Wachovia answered. BB&T's response is essentially ideological -- not surprising, perhaps, given the bank's CEO's recent fulminations on the AP that his favorite writer is Ayn Rand. Then again, ex-chairman Greenspan was also once a fan… 

February 27, 2006

   Last week we reported on and raised to the Federal Reserve a Community Reinvestment Act scam, in which Gold Bank, which M&I is trying to buy, was given CRA credit by the Federal Reserve for buying bonds which in fact never resulted in a single unit of housing, low- or moderate-income or otherwise.  In response, M&I and Gold Bank filed letters with the Fed specifying at least the names and dates of the bonds, while admitting that no housing was built, and that the CRA credit has never been withdrawn or corrected --

“On July 19, 2001, Gold Bank purchased the City of Lee’s Summit, Missouri, Multifamily Housing Revenue Bonds, Series 2001C, for $4,600,000 (the ‘Missouri Bonds’). On February 28, 2002, Gold Bank purchased the Oklahoma Housing Development Authority, Multifamily Housing Revenue Bonds, 2002 Series C, for $5,000,000 (the ‘Oklahoma Bonds’). On August 15, 2002, Gold Bank purchased the Community Development Authority of the City of Manitowoc, Wisconsin Multifamily Housing Revenue Bonds, 2002 Series C, for $4,600,000 (the ‘Wisconsin Bonds’)… In August and September 2005, in large part because no housing projects were funded with the proceeds of the Bonds, the [IRS] notified Gold Bank that it had made preliminary determinations that the interest which the Issuers previously paid Gold Bank on the Bonds was not excludable from the gross income of Gold Bank for tax purposes. On October 17, 2005, Gold Bank paid approximately $3.5 million to settle the IRS claim…

  “Gold Bank purchased the Bonds based upon representations from the Issuers that the proceeds of the Bonds would be used by the Issuers to make loans for low and moderate income multifamily housing projects… Notwithstanding such Issuer representations, the Issuers subsequently did not fund any low and moderate income multifamily housing projects with the proceeds of the Bonds… In fact, prior to the CRA examination, Gold Bank had disclosed to the Kansas City Federal Reserve… the impairment in the value of the Bonds and the reasons for such impairment.”

CRA credit given (and not retracted) for a fraudulent investment which never resulted in a single unit of housing. Is this what the Federal Reserve has come to?

February 20, 2006

            At new chairman Bernanke’s testimony to the House of Representatives last week, the Community Reinvestment Act was mentioned, albeit a single time. Mr. Bernanke said

“my very first trip as a governor of the Federal Reserve was to Brownsville, Texas, to see how a set of nonprofit organizations were using funds provided under the Community Reinvestment Act from banking institutions to rede

(c) 2009-2011

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July 23, 2012

The Fed has done it again: improperly withheld basic information about an application, as admitted even by the pro-bank Governor now in charge of ruling on FOIA appeals. Governor Jay Powell, recently withholding ING - Capital One information, now finds on another application (BB&T) that information was improperly withheld under Exemption 5 and can now be released including records that "describe transaction filings and discuss comment period timings and news articles." The rest -- at least 156 full pages -- he withholds.

Meanwhile one of Governor Powell's ex employers has decided to hold onto its stake in a bank in Taiwan, Ta Chong. How does or will Powell recuse himself? Watch this site.

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Copyright 1999 - 2023 Inner City Press/Community on the Move, Inc..   All rights reserved.  As should be clear, but in an excess of caution: under no circumstances does the information in this column (or web site) represent a recommendation to buy or sell securities.  For further information, or to request reprint or other permission, contact: Permissions Coordinator, Legal Administration, Inner City Press, P.O. Box 580188, Mount Carmel Station, Bronx, NY 10458.  Phone: (718) 716-3540.  E-mail: MLee [at] innercitypress [dot] org