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.
Inner City Press is working on another FOIA story with documents due this week from Washington. On both cases, judicial review of denial of access to information on appeal may well be warranted. Watch this site.
