By Matthew R. Lee, Exclusive FOIA fee denial
SOUTH BRONX, SDNY, June 24 – Payday lender Scott Tucker's lawyer Conly Schulte has been indicted on charges of conspiracy to collect unlawful debts by the U.S. Attorney for the Southern District of New York, Inner City Press from the SDNY courthouse can report. The case has been assigned to SDNY District Judge Deborah A. Batts.
The indictment states that "The Tucker Payday Lending Organization was an organized criminal group with leadership based in Overland Park, Kansas, and that operated through the United States, including in the Southern District of New York... Conly Schulte, the defendant, served as counsel to certain Native American tribes associated with the Tucker Payday Lending Organization. Schulte also represented an entity of the Tucker Payday Lending Organization."
Meanwhile in DC the Consumer Financial Protection Bureau under Kathy Kraninger has issued a rule relieving payday lenders of the duty to comply with the ability-to-repay standard for the CFPB’s short term lending rule of November 2017.
Here's how the CFPB breezily put it: "The Bureau of Consumer Financial Protection is issuing this final rule to delay the August 19, 2019 compliance date for the mandatory underwriting provisions of the regulation promulgated by the Bureau in November 2017 governing Payday, Vehicle Title, and Certain High-Cost Installment Loans (2017 Final Rule or Rule). Compliance with these provisions of the Rule is delayed by 15 months, to November 19, 2020." Whats 15 months among friends?
The CFPB is also thumbing its nose at the US Administrative Procedures Act and proposing to undermine the Home Mortgage Disclosure Act.
CFPB is trying three separate but inter-related attacks. The first is to raise the threshold for reporting HMDA data, to exempt wither 36% or 53% of banks and credit unions, a proposal on which the comment period runs only to June 12, here. (Comments are going in from such banks as Village Bank and Hamilton Bank and even, incongruously, Brenda Muniz OF the CFPB.)
Second is to weaken the "data points" which will be reported by those still required to under HMDA. The CFPB wants to drop such information as "reason for denial" and "debt to income ratio" - the very information that banks so often cite in response to CRA challenged by Fair Finance Watch and others, as justifying their disparities. Now the CFPB wants to not collect this supposed justification of disparities. Just trust us, is the message. Well, no. This comment period runs to July 8, here.
Finally, without any comment period at all, the CFPB is eliminating the public's front door to the HMDA data, the HMDA Explorer web site that many community groups such as the hundreds that are members of NCRC use to assess banks in their communities. The CFPB wants to take even this away. They should be sued. We'll have more on this. And see @SDNYLIVE. Inner City Press requested the WSFS merger records months ago, along with a request for a waiver of fees as the other Federal bank regulators grant it and other NCRC members and as the OCC has until now.
But Otting is different. First he denied a fee waiver on Inner City Press' request for his calendar. Then he relented on that, after Inner City Press citing case law and precedent. But seemingly in retaliation, he has denied access to a merger application subject to public comment. Denial here on Scribd.
Ironically the grounds cited is that releasing this information about a merger subject to public comment would not increase the public's understanding. This shows Otting contempt for CRA - and for the public. Inner City Press has filed this appeal with Otting, et al.:
"Dear Comptroller Otting:
Inner City Press traditionally has received fee waivers from the Office of the Comptroller of the Currency under 5 U.S.C. § 552(a)(4)(A)(iii) and 12 C.F.R. § 4.17. Waivers were granted on the basis of similar or identical language contained in the instant Freedom of Information Act (FOIA) request, which is now the subject of OCC’s waiver rejection. Outrageously, on Inner City Press' FOIA request for the portions of the WSFS - Beneficial merger application that the applicants unilaterally requested confidential treatment for, your FOIA Manager Frank Vance writes:
"Concerning the third consideration, contribution to public understanding, we examined whether or not disclosure of the requested records would contribute to the understanding of the public at large, as opposed to the understanding of the requester or a small number of interested persons. In other words, we considered whether or not you demonstrated how contribution to public understanding outweighs personal benefit to you. I find that you did not demonstrate this component; therefore, you did not satisfy the regulatory requirement of 12 C.F.R. 4.17(b)(4)(i). In light of this, there is no need to analyze your justification with respect to 12 C.F.R. 4.17(b)(4)(ii). "
So you are claiming that the public is not interested in, and should be constrained in access, the bank merger applications on which the public has a right to comment. You are claiming that to get any OCC review of the often outrageously overbroad requests for confidential treatment of the banks you supervise, the public has to pay untold fees. This is a new low, and Inner City Press is appealing. Inner City Press Is Eligible for a Fee Waiver In accordance with 5 U.S.C. § 552(a)(4)(A)(iii) and 12 C.F.R. § 4.17, Inner City Press is eligible for, and requests, a waiver of fees associated with processing its request for records. The subject of this request—the review of a merger to close at least 25 bank branches -- concerns the operations of the federal government, and the disclosures will likely contribute to a better understanding of relevant government procedures by the general public in a significant way. Moreover, the request is primarily and fundamentally for non-commercial purposes. Inner City Press requests a waiver of fees because disclosure of the requested information is “in the public interest because the disclosure . . . [i]s likely to contribute significantly to public understanding” of government operations or activities.
Specifically, the disclosure of the information sought under this request will document and reveal the activities of the federal government, including how your OCC reviews the CRA and branch closing aspects of the merger. As discussed below, Inner City Press has both the ability and the intention to effectively convey the information it receives to the public. Inner City Press does not have a commercial interest in the requested information. This request is primarily and fundamentally for non-commercial purposes. Inner City Press does not have a commercial purpose and the release of the information requested is not in its financial interest. Inner City Press’s mission is to engage in cutting-edge investigative reporting focused, fair lending, development, and government accountability advocacy. Core to its mission is to educate the public about government activities and to ensure the accountability of government officials. Inner City Press uses the information gathered, and its analysis of it, to educate the public through reports, press releases, or other media. It also makes materials it gathers available on its public website and promotes their availability on social media platforms. Inner City Press has demonstrated its commitment to the public disclosure of documents and creation of editorial content. For example, Inner City Press’s website contains dozens of articles describing the operations of the federal government from a unique perspective, including about the OCC:
In SDNY FreddieMac Via FHFA of Otting Says Its Negligent Late Objection Is Fine As Otting Lawless
In SDNY FreddieMac Via FHFA of Otting Says Its Negligent Late Objection Is Fine As Otting Lawless
And this.
Inner City Press’s website contains many more examples demonstrating its ability and intention to inform the public about government activities, including specifically related to how the subject of the instant FOIA request spent his time at OCC. Accordingly, Inner City Press qualifies for a fee waiver.
Significantly, well before this outrageous denial which now longer keeps secret the requested documents, even the OCC wrote "your correspondence of March 8 is more robust and sets forth with reasonable specificity the grounds to justify the OCC's granting of the fee waiver. Therefore, your request for a fee waiver with respect to FOLA request 2019-00104 is granted. The OCC's Disclosure Services office will remove the matter from "Hold" status and proceed to process the request."
Of course, even in that case [about your / Otting's schedule] in the two month since our letter we have not received a single document from your OCC.
There can be no doubt that Inner City Press qualifies for a waiver based on the foregoing. Moreover, Inner City Press’s long track record of fee waivers is further evidence of our current eligibility. In particular, we have demonstrated repeatedly our intent and ability to inform the public about government operations and that our requests for information are not primarily in our commercial interest.
We find your OCC's FOIA and other practices outrageous and demand expeditious ruling on this appeal and release of the already long delayed documents. Matthew Lee, Esq., Executive Director Inner City Press / Fair Finance Watch." Watch this site.
Otting has been sued again for offering a CRA-lax fintech bank charter. The lawsuit, filed September 14 by the New York State Department of Financial Services, says Otting "puts New York financial consumers—and often the most vulnerable ones—at great risk of exploitation by federally-chartered entities improperly insulated by New York law. The OCC’s reckless folly should be stopped." It's Vullo v Office of the Comptroller of the Currency, 18-cv-8377, U.S. District Court, Southern District of New York. On May 2, SDNY Judge Victor Marrero allowed DFS' suit to go forward. He wrote, "As a result of the Fintech Charter Decision, New York State's regulations for over "600 non-bank financial services firms" are all at risk of becoming null and void. (Complaint ~ 10.) Of course, certain steps, namely the application for, and then the granting of, an SPNB charter must occur before a fintech firm can flout New York's laws. But those steps do not stymie DFS's standing. For both steps, DFS benefits from the supposition that the government enforces and acts on its recent, non-moribund laws. See Hedges v. Obama, 724 F.3d 170, 19 7 ( 2d Cir. 2 013) . Specifically, DFS alleges that OCC has invited fintech companies to its offices to discuss SPNB charters, potentially indicating at least some demand for, and interest in, such charters." Sounds like Otting, the secret meetings of the type the OCC has YET to disclose in response to Inner City Press' FOIA request which was delayed by the OCC disputing fee waivers as it never had before, We'll have more on this. The OCC's spokesman Bryan Hubbard had said the agency "is confident in its authority to grant national bank charters including special purpose national bank charters to companies that are engaged in the business of banking, meet the qualifications for becoming a national bank, and apply to conduct business as part of the federal banking system. The agency will vigorously defend that authority, but will not comment on pending or potential litigation.” Otting, as we've noted, as a pre-OCC history of generating dubious comment supporting mergers like his OneWest with CIT. Otting's OCC wrote to Fair Finance Watch rebuffing Inner City Press' straight forward request for information and stating on the "Application for KleinBank, Chaska, MN to Merge with and into Old National Bank,
Evansville, IN, Dear Mr. Lee, Esq.: The Office of the Comptroller of the Currency (OCC) acknowledges receipt of your comments regarding the above referenced application. The comment letter requests the OCC (i) extend the public comment period and (ii) hold a public hearing on the application. The OCC has decided not to extend the comment period." Klein settled charges of racial discrimination, quite recently. We'll have more on this. #TreasureCRA. With the Consumer Financial Protection Bureau under Mick Mulvaney moving to undermine liability for disparate impact discrimination, on September 7 a new, smaller and less consumer representative Consumer Advisory Board was announced. Now on September 10 this, from members of the former CAB that was disbanded by Mulvaney in June: "We are disappointed that the current administration of the CFPB chose to only appoint nine members to this new CAB. While each of the individual members is qualified in her or his own right, the fact that there are so few of them means that Acting Director Mulvaney’s CAB lacks sufficient diversity and depth of perspective. There are only 2 consumer advocates, whereas there were at least 8 advocates on the former 25 member CAB. Ironically, there are no large financial institutions, major credit card providers, or debt collectors on this new CAB. While these sectors probably have other opportunities for access with the CFPB, one of the most valuable aspects of the recently disbanded CAB was that it provided a forum for fruitful and productive conversations among a variety of stakeholders in consumer finance, which often generated valuable insights for the Bureau and the CAB members. This will be missing from the new CAB. The lack of a multitude of perspectives is ironic given that a stated reason for disbanding the former CAB was to increase the diversity of viewpoints on the Board.
“We are also disappointed that Acting Director Mulvaney and his appointees have chosen to limit the service of these CAB members to one year instead of three years as with previous CAB members. Because the CAB meets only a few times a year, it takes one year for members to become familiar with the CFPB and other CAB members, and to get up to speed. New members will be just getting started when their terms end. One year does not permit members to provide the type of rich feedback and perspective that traditionally has been the role of the CAB.
As consumer advocates and academics with decades of experience among us, we are committed to continue working to ensure that consumer protection and fair market practices are given due priority. We must ensure that the most financially vulnerable Americans are protected from the worst abuses of predatory consumer practices.
Ann Baddour, former chair of the disbanded CAB and director of the Fair Financial Services Project of Texas Appleseed stated that “We hope the new panel builds on the work of the previous boards, and ensures that the CFPB stays on track in meeting its consumer protection mission. We are happy to be a resource to them in their important work.”
Ann Baddour, Texas Appleseed; former Consumer Advisory Board Chair
Lynn Drysdale, Jacksonville Area Legal Aid, Inc.; former Consumer Advisory Board Vice Chair
Kathleen Engel, Suffolk University Law School
Ruhi Maker, Empire Justice Center
Lisa Servon, University of Pennsylvania
Chi Chi Wu, National Consumer Law Center
Josh Zinner, Interfaith Center on Corporate Responsibility
(Affiliations for informational purposes only)."
Evansville, IN, Dear Mr. Lee, Esq.: The Office of the Comptroller of the Currency (OCC) acknowledges receipt of your comments regarding the above referenced application. The comment letter requests the OCC (i) extend the public comment period and (ii) hold a public hearing on the application. The OCC has decided not to extend the comment period." Klein settled charges of racial discrimination, quite recently. We'll have more on this. #TreasureCRA. With the Consumer Financial Protection Bureau under Mick Mulvaney moving to undermine liability for disparate impact discrimination, on September 7 a new, smaller and less consumer representative Consumer Advisory Board was announced. Now on September 10 this, from members of the former CAB that was disbanded by Mulvaney in June: "We are disappointed that the current administration of the CFPB chose to only appoint nine members to this new CAB. While each of the individual members is qualified in her or his own right, the fact that there are so few of them means that Acting Director Mulvaney’s CAB lacks sufficient diversity and depth of perspective. There are only 2 consumer advocates, whereas there were at least 8 advocates on the former 25 member CAB. Ironically, there are no large financial institutions, major credit card providers, or debt collectors on this new CAB. While these sectors probably have other opportunities for access with the CFPB, one of the most valuable aspects of the recently disbanded CAB was that it provided a forum for fruitful and productive conversations among a variety of stakeholders in consumer finance, which often generated valuable insights for the Bureau and the CAB members. This will be missing from the new CAB. The lack of a multitude of perspectives is ironic given that a stated reason for disbanding the former CAB was to increase the diversity of viewpoints on the Board.
“We are also disappointed that Acting Director Mulvaney and his appointees have chosen to limit the service of these CAB members to one year instead of three years as with previous CAB members. Because the CAB meets only a few times a year, it takes one year for members to become familiar with the CFPB and other CAB members, and to get up to speed. New members will be just getting started when their terms end. One year does not permit members to provide the type of rich feedback and perspective that traditionally has been the role of the CAB.
As consumer advocates and academics with decades of experience among us, we are committed to continue working to ensure that consumer protection and fair market practices are given due priority. We must ensure that the most financially vulnerable Americans are protected from the worst abuses of predatory consumer practices.
Ann Baddour, former chair of the disbanded CAB and director of the Fair Financial Services Project of Texas Appleseed stated that “We hope the new panel builds on the work of the previous boards, and ensures that the CFPB stays on track in meeting its consumer protection mission. We are happy to be a resource to them in their important work.”
Ann Baddour, Texas Appleseed; former Consumer Advisory Board Chair
Lynn Drysdale, Jacksonville Area Legal Aid, Inc.; former Consumer Advisory Board Vice Chair
Kathleen Engel, Suffolk University Law School
Ruhi Maker, Empire Justice Center
Lisa Servon, University of Pennsylvania
Chi Chi Wu, National Consumer Law Center
Josh Zinner, Interfaith Center on Corporate Responsibility
(Affiliations for informational purposes only)."
Meanwhile state Attorneys General from New York and 13 other states have delivered a letter of opposition, on September 5. NY AG Barbara Underwood said, "the Equal Credit Opportunity Act was enacted because of our country’s sordid history of credit discrimination — and it’s unbelievable that the CFPB is considering refusing to use it to protect consumers." The letter signed by the attorneys general of North Carolina, California, Illinois, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New York, Oregon, Rhode Island, Vermont, Virginia and the District of Columbia stated that they "will not hesitate to uphold the law if CFPB acts in a manner contrary to law with respect to interpreting ECOA." We'll have more on that - and this: the US Office of the Comptroller of the Currency Joseph Otting on August 28 began a process to weaken and take the community out of the 1977 Community Reinvestment Act. Now in September he has given conditional approval to a fintech bank, Varo Bank of Varo Money, which will include only Salt Lake City, Utah in its CRA assessment area. The CEO is Colin Walsh, previously of scandal plagued Wells Fargo. But will the FDIC, which has not for now joined Otting's crusade, hand out deposit insurance? On August 29 when the OCC purported to solicit public comments for the CRA evaluation of banks in the fourth quarter of 2018 and even first quarter of 2019, the OCC's notice did not even mention or link to Otting's proposal to change the CRA. Here is what the OCC e-mailed out on August 29. So the community is not informed - but the industy is. Even open sources are full of banks and their lobbying groups celebrating and preparing to support Otting's proposal(s). From Louisiana, there is this: "GAME FACE ConsumerBankers GC Steve Zeisel is ready for today’s Membership Call regarding the @USOCC ANPR on #cra. #intense. #focus." On the other hands, there's this, on and of which we'll have more. The protagonist, akin to Scott Pruitt until recently at the US Environmental Protection Agency, is Joe Otting. While Reuters blandlynoted that he is "a former banker," the bank he headed, OneWest, was accused of predatory lending and when its acquisition by the CIT Group was challenged by Fair Finance Watch, CRC and others Otting arranged for seemingly counterfeit or compelled comments supporting the merger. In this light, Question 11 of his "Advanced Notice of Proposal Rulemaking" or ANPR is noteworthy: "11. How can community involvement be included in an evaluation process that uses a
metric-based framework?" How, indeed. Here's what Otting wrote as a banker, already long public, in support of his merger:
metric-based framework?" How, indeed. Here's what Otting wrote as a banker, already long public, in support of his merger:
"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.
888 East Walnut Street
Pasadena, CA 91101"
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.
888 East Walnut Street
Pasadena, CA 91101"
There will be fight-back, under NCRC's TreasureCRA campaign. Watch this site - including on actual enforcement of CRA. A bank that was sued by the US Justice Department in 2017 for redlining and discrimination is trying to sell itself to Old National, and Fair Finance Watch has formally challenged it under the Community Reinvestment Act in a filing to the Federal Reserve on the last day of the comment period. From the filing: "This is a timely first comment opposing the Applications of Old National Bancorp to merge with Klein Financial, Inc., Chaska, Minnesota, and thereby indirectly acquire KleinBank, also of Chaska, Minnesota.
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.
It was only last year that “the U.S. Justice Department accused Chaska-based KleinBank of redlining, the illegal practice of denying mortgage loans to minority residents. Lawyers from the department's civil rights division said KleinBank engaged in discrimination in Minneapolis and St. Paul by failing to market its services and open bank branches in areas dominated by minorities. KleinBank, which operates 21 branches in mostly outer-ring suburbs of the Twin Cities, is one of Minnesota's largest community banks. 'KleinBank's discriminatory practices … have been intentional and willful, and implemented with reckless disregard for the rights of individuals on the basis of their race and/or national origin,' the complaint said.”
Now, attempting to cash in / out of that discrimination, Klein Bank seeks to sell, to Old National which has its own insufficient records. Fair Finance Watch has been tracking Old National:
In 2012 in its Evansville (Headquarters) MSA for conventional home purchase loans back in 2012, Old National Bank made only six such loans to African Americans. In 2016, the most recent year for which data is available, Old National made only THREE such loans to African Americans. In Table 4-1, in 2012 it made three such loans to African Americans. In 2016 this fell to one.
Old National has gotten worse. It cannot be allowed to acquire Klein so recently prosecuted for discrimination.
(Separately, note that in Evansville MSA in 2016, Old National reported a 100% approved and originated rate for both African Americans and Latinos, until in other MSAs - this is not credible, presumptively indicates pre-screening and should be investigated in connection with this Klein proposal.)
For refinance loans in Evansville in 2012, Old National made eight such loans to African Americans. This fell to four in 2016.
For home improvement loans in the Evansville MSA, Old National in 2012 made five such loans to African Americans. This fell to four in 2016.
For refinance loans in Indianapolis in 2012, Old National made 18 such loans to African Americans. This fell to a mere seven in 2016, when Old National denied 62% of applications from African Americans (see above).
Old National has gotten much worse. It cannot be allowed to acquire Klein so recently prosecuted for discrimination.
Also troubling regarding Old National is its history of branch closings. According to its hometown newspaper the Evansville Courier News & Press
"since 2004 Old National has purchased 175 banking offices, either through acquiring smaller financial institutions or buying selected office locations. Old National has also shed 140 banking offices by consolidating 121 locations and by selling 19 other offices."
Old National is a bank with a disparate lending record that specializes in buying and closing bank branches - now it seeks to acquire Klein Bank prosecuted only last year for redlining.
ICP is requesting evidentiary hearings and that this proposed acquisition, on the current record, not be approved. There is no public benefit." We'll have more on this - and this: the US Comptroller of the Currency Joseph Otting, who said he's never witnessed discrimination and is poised to attack the Community Reinvestment Act, yesterday announced he'll be giving out "fintech" bank charters. CRA won't apply. Instead, the announcement vaguely says, "The expectations for promoting financial inclusion will depend on the company’s business model and the types of planned products, services, and activities." But what to expect of the OCC of Otting? When at OneWest, he arranged for Astro-turf and even fake public comments supporting its acquisition by the CIT Group. In other comment period news, we like it when banks challenge each others. Like this, today: "The Independent Community Bankers of America (ICBA) today called on the Federal Deposit Insurance Corp. to deny Nelnet Bank’s deposit insurance application for its proposed industrial loan corporation and impose a two-year moratorium on future ILC applications. Like the since-withdrawn applications of SoFi Bank and Square, Nelnet’s is designed to avoid the legal restrictions of the Bank Holding Company Act, ICBA wrote in a letter to the agency. “The ILC loophole allows commercial interests to own full-service banks while avoiding the legal restrictions and regulatory supervision that apply to other bank holding companies—threatening the financial system and creating an uneven regulatory playing field,” ICBA President and CEO Rebeca Romero Rainey said. “To support a safe and sound financial system and to maintain the separation of banking and commerce, the FDIC should impose a two-year application moratorium and Congress should close the ILC loophole for good. Our deposit-insurance system was created to protect depositors—not commercial firms.” Regulation under the Bank Holding Company Act entails consolidated supervision of the holding company by the Federal Reserve and restricts the activities of the holding company and its affiliates to those that are closely related to banking. Because of a loophole in the law, companies that own ILCs are not subject to BHCA supervision even though the ILC charter is a full-service banking charter. As a result, companies that own FDIC-insured ILCs are not subject to consolidated supervision and can engage in non-banking commercial activities. Citing several previous moratoriums on ILC applications, ICBA’s letter notes that Nelnet Bank is applying as an ILC—not a commercial bank—so its parent company can retain its commercial activities. These include investing in start-ups, and maintaining telecommunications, investment and sports-software businesses. Nelnet Inc. should be subject to the same restrictions and supervision as any other bank holding company, ICBA wrote." Later on July 31 New York regulator Maria T. Vullo issued this: "The New York State Department of Financial Services fiercely opposes the Department of Treasury’s endorsement of regulatory ‘sandboxes’ for financial technology companies. The idea that innovation will flourish only by allowing companies to evade laws that protect consumers, and which also safeguard markets and mitigate risk for the financial services industry, is preposterous. Toddlers play in sandboxes. Adults play by the rules. Companies that truly want to create change and thrive over the long-term appreciate the importance of developing their ideas and protecting their customers within a strong state regulatory framework. DFS also strong opposes today’s decision by the Office of the Comptroller of the Currency to begin accepting applications for national bank charters from nondepository financial technology (fintech) companies. DFS believes that this endeavor, which is also wrongly supported by the Treasury Department, is clearly not authorized under the National Bank Act. As DFS has noted since the OCC’s proposal, a national fintech charter will impose an entirely unjustified federal regulatory scheme on an already fully functional and deeply rooted state regulatory landscape." Sounds good -- but NYS DFS has for example allowed First Republic Bank to redline The Bronx, and hasn't even confirmed receipt of a timely comment opposing it. We'll have more on this - and on this: First Republic Bank, which excludes The Bronx as well as Brooklyn and Queens from its assessment area while funding outer borough slumlords, has applied to New York bank regulators to open another branch in Manhattan. Fair Finance Watch has filed opposition, along with Inner City Press, also citing FRB's record of displacement in California: On behalf of Inner City Press / Fair Finance Watch (ICP), this is a timely comment opposing the application by First Republic Bank to open a new insured deposit-taking facility at 329 Tenth Avenue, Borough of Manhattan, City of New York 10001. First Republic Bank is engaged in redlining. Its branches in New York are entirely in Manhattan, and only in the most affluent sections. It excludes from its CRA Assessment Area, in their entirety, the boroughs of The Bronx, Brooklyn, Queens and Staten Island. This is an outrage, and that ICP had thought was no longer allowed by regulars. (ICP previously challenged and got changes such exclusionary Assessment Areas at Bank of New York, HSBC, predecessors of Bank of America and others). Cynically, while excluding the outer boroughs from its assessment area, First Republic Bank does business with landlords who have been described as slumlords, such as Moshe Piller. See, e.g., Daily News, “Moshe Piller, owner of the Hunts Point Ave. building in the Bronxwhere two children died when a faulty radiator spewed steam into their bedroom.” (ICP also takes note of the San Francisco analysis of its fellow NCRC member CRC). Fair Finance Watch has reviewed First Republic Bank's most recent publicly available HMDA data for the NYC MSA and, for home purchase loans, find that FRB made 283 such loans to whites, and only three each to Latino and African American applicants. Its denial rate disparity is astronomical: 20% denial rate for African American, less than 1% for whites. Again: First Republic Bank is a redliner. For all of these reasons, First Republic Bank's applications should be denied." We'll have more on this - and this: People's United Bank, which has applied to buy Farmington Bank in Connecticut, has become more and not less disparate in its lending, as shown by analysis of U.S. Home Mortgage Disclosure Act data by Fair Finance Watch submitted to the US Office of the Comptroller of the Currency by Inner City Press in opposition to the proposed merger. From the timely July 27 filing: "This is a timely first comment opposing and requesting an extension of the OCC's public comment period on the Application by People's United Bank to acquire Farmington Bank.
In the the New York City MSA in 2014, People's United made 82 home purchase loans to whites and NONE to African Americans or Latinos. We note that People's has been in these markets since 2010 -- NOT “recently” -- and that New York City is not the “Lower Hudson Valley. Then we found 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.
In 2016, the most recent year for which HMDA data is publicly available, People's got even worse: in the NYC MSA it made 144 home purchase loans to whites (more than in 2015) and still only one to an African American.
For refinance loans in the New York City MSA in 2014, People's United made 24 loans to whites, 1 to an African American and four to Hispanics. By 2016, it was again worse: 165 loans to whites and only two to African Americans.
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.
People's United record is hardly sufficient in the Hartford MSA where it now proposes to acquire Farmington Bank. In 2016 in the Hartford MSA, People's United made 162 home purchase loans to whites and only 10 to African Americans and only 14 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.
In this context, the comment period should be extended so that public evidentiary hearings can be held, and the application should be denied." Bank of America has been sued for failure to maintain properties it forecloses on in communities of color. Nationwide, the lawsuit contends, 45 percent of the Bank of America properties in communities of color had 10 or more maintenance or marketing deficiencies, while only 11 percent of the Bank of America properties in predominantly white neighborhoods had 10 or more maintenance or marketing deficiencies. 64 percent of the Bank of America properties in communities of color had trash or debris visible on the property, while only 31 percent of the Bank of America properties in predominantly white neighborhoods had trash visible on the property. 37 percent of the Bank of America properties in communities of color had unsecured or broken doors, while only 16 percent of the Bank of America properties in predominantly white neighborhoods had unsecured or broken doors. 49.6 percent of the Bank of America properties in communities of color had damaged, boarded, or unsecured windows, while only 23.5 percent of the Bank of America properties in white neighborhoods had damaged, boarded or unsecured windows.
In 2012 in its Evansville (Headquarters) MSA for conventional home purchase loans back in 2012, Old National Bank made only six such loans to African Americans. In 2016, the most recent year for which data is available, Old National made only THREE such loans to African Americans. In Table 4-1, in 2012 it made three such loans to African Americans. In 2016 this fell to one.
Old National has gotten worse. It cannot be allowed to acquire Klein so recently prosecuted for discrimination.
(Separately, note that in Evansville MSA in 2016, Old National reported a 100% approved and originated rate for both African Americans and Latinos, until in other MSAs - this is not credible, presumptively indicates pre-screening and should be investigated in connection with this Klein proposal.)
For refinance loans in Evansville in 2012, Old National made eight such loans to African Americans. This fell to four in 2016.
For home improvement loans in the Evansville MSA, Old National in 2012 made five such loans to African Americans. This fell to four in 2016.
For refinance loans in Indianapolis in 2012, Old National made 18 such loans to African Americans. This fell to a mere seven in 2016, when Old National denied 62% of applications from African Americans (see above).
Old National has gotten much worse. It cannot be allowed to acquire Klein so recently prosecuted for discrimination.
Also troubling regarding Old National is its history of branch closings. According to its hometown newspaper the Evansville Courier News & Press
"since 2004 Old National has purchased 175 banking offices, either through acquiring smaller financial institutions or buying selected office locations. Old National has also shed 140 banking offices by consolidating 121 locations and by selling 19 other offices."
Old National is a bank with a disparate lending record that specializes in buying and closing bank branches - now it seeks to acquire Klein Bank prosecuted only last year for redlining.
ICP is requesting evidentiary hearings and that this proposed acquisition, on the current record, not be approved. There is no public benefit." We'll have more on this - and this: the US Comptroller of the Currency Joseph Otting, who said he's never witnessed discrimination and is poised to attack the Community Reinvestment Act, yesterday announced he'll be giving out "fintech" bank charters. CRA won't apply. Instead, the announcement vaguely says, "The expectations for promoting financial inclusion will depend on the company’s business model and the types of planned products, services, and activities." But what to expect of the OCC of Otting? When at OneWest, he arranged for Astro-turf and even fake public comments supporting its acquisition by the CIT Group. In other comment period news, we like it when banks challenge each others. Like this, today: "The Independent Community Bankers of America (ICBA) today called on the Federal Deposit Insurance Corp. to deny Nelnet Bank’s deposit insurance application for its proposed industrial loan corporation and impose a two-year moratorium on future ILC applications. Like the since-withdrawn applications of SoFi Bank and Square, Nelnet’s is designed to avoid the legal restrictions of the Bank Holding Company Act, ICBA wrote in a letter to the agency. “The ILC loophole allows commercial interests to own full-service banks while avoiding the legal restrictions and regulatory supervision that apply to other bank holding companies—threatening the financial system and creating an uneven regulatory playing field,” ICBA President and CEO Rebeca Romero Rainey said. “To support a safe and sound financial system and to maintain the separation of banking and commerce, the FDIC should impose a two-year application moratorium and Congress should close the ILC loophole for good. Our deposit-insurance system was created to protect depositors—not commercial firms.” Regulation under the Bank Holding Company Act entails consolidated supervision of the holding company by the Federal Reserve and restricts the activities of the holding company and its affiliates to those that are closely related to banking. Because of a loophole in the law, companies that own ILCs are not subject to BHCA supervision even though the ILC charter is a full-service banking charter. As a result, companies that own FDIC-insured ILCs are not subject to consolidated supervision and can engage in non-banking commercial activities. Citing several previous moratoriums on ILC applications, ICBA’s letter notes that Nelnet Bank is applying as an ILC—not a commercial bank—so its parent company can retain its commercial activities. These include investing in start-ups, and maintaining telecommunications, investment and sports-software businesses. Nelnet Inc. should be subject to the same restrictions and supervision as any other bank holding company, ICBA wrote." Later on July 31 New York regulator Maria T. Vullo issued this: "The New York State Department of Financial Services fiercely opposes the Department of Treasury’s endorsement of regulatory ‘sandboxes’ for financial technology companies. The idea that innovation will flourish only by allowing companies to evade laws that protect consumers, and which also safeguard markets and mitigate risk for the financial services industry, is preposterous. Toddlers play in sandboxes. Adults play by the rules. Companies that truly want to create change and thrive over the long-term appreciate the importance of developing their ideas and protecting their customers within a strong state regulatory framework. DFS also strong opposes today’s decision by the Office of the Comptroller of the Currency to begin accepting applications for national bank charters from nondepository financial technology (fintech) companies. DFS believes that this endeavor, which is also wrongly supported by the Treasury Department, is clearly not authorized under the National Bank Act. As DFS has noted since the OCC’s proposal, a national fintech charter will impose an entirely unjustified federal regulatory scheme on an already fully functional and deeply rooted state regulatory landscape." Sounds good -- but NYS DFS has for example allowed First Republic Bank to redline The Bronx, and hasn't even confirmed receipt of a timely comment opposing it. We'll have more on this - and on this: First Republic Bank, which excludes The Bronx as well as Brooklyn and Queens from its assessment area while funding outer borough slumlords, has applied to New York bank regulators to open another branch in Manhattan. Fair Finance Watch has filed opposition, along with Inner City Press, also citing FRB's record of displacement in California: On behalf of Inner City Press / Fair Finance Watch (ICP), this is a timely comment opposing the application by First Republic Bank to open a new insured deposit-taking facility at 329 Tenth Avenue, Borough of Manhattan, City of New York 10001. First Republic Bank is engaged in redlining. Its branches in New York are entirely in Manhattan, and only in the most affluent sections. It excludes from its CRA Assessment Area, in their entirety, the boroughs of The Bronx, Brooklyn, Queens and Staten Island. This is an outrage, and that ICP had thought was no longer allowed by regulars. (ICP previously challenged and got changes such exclusionary Assessment Areas at Bank of New York, HSBC, predecessors of Bank of America and others). Cynically, while excluding the outer boroughs from its assessment area, First Republic Bank does business with landlords who have been described as slumlords, such as Moshe Piller. See, e.g., Daily News, “Moshe Piller, owner of the Hunts Point Ave. building in the Bronxwhere two children died when a faulty radiator spewed steam into their bedroom.” (ICP also takes note of the San Francisco analysis of its fellow NCRC member CRC). Fair Finance Watch has reviewed First Republic Bank's most recent publicly available HMDA data for the NYC MSA and, for home purchase loans, find that FRB made 283 such loans to whites, and only three each to Latino and African American applicants. Its denial rate disparity is astronomical: 20% denial rate for African American, less than 1% for whites. Again: First Republic Bank is a redliner. For all of these reasons, First Republic Bank's applications should be denied." We'll have more on this - and this: People's United Bank, which has applied to buy Farmington Bank in Connecticut, has become more and not less disparate in its lending, as shown by analysis of U.S. Home Mortgage Disclosure Act data by Fair Finance Watch submitted to the US Office of the Comptroller of the Currency by Inner City Press in opposition to the proposed merger. From the timely July 27 filing: "This is a timely first comment opposing and requesting an extension of the OCC's public comment period on the Application by People's United Bank to acquire Farmington Bank.
In the the New York City MSA in 2014, People's United made 82 home purchase loans to whites and NONE to African Americans or Latinos. We note that People's has been in these markets since 2010 -- NOT “recently” -- and that New York City is not the “Lower Hudson Valley. Then we found 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.
In 2016, the most recent year for which HMDA data is publicly available, People's got even worse: in the NYC MSA it made 144 home purchase loans to whites (more than in 2015) and still only one to an African American.
For refinance loans in the New York City MSA in 2014, People's United made 24 loans to whites, 1 to an African American and four to Hispanics. By 2016, it was again worse: 165 loans to whites and only two to African Americans.
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.
People's United record is hardly sufficient in the Hartford MSA where it now proposes to acquire Farmington Bank. In 2016 in the Hartford MSA, People's United made 162 home purchase loans to whites and only 10 to African Americans and only 14 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.
In this context, the comment period should be extended so that public evidentiary hearings can be held, and the application should be denied." Bank of America has been sued for failure to maintain properties it forecloses on in communities of color. Nationwide, the lawsuit contends, 45 percent of the Bank of America properties in communities of color had 10 or more maintenance or marketing deficiencies, while only 11 percent of the Bank of America properties in predominantly white neighborhoods had 10 or more maintenance or marketing deficiencies. 64 percent of the Bank of America properties in communities of color had trash or debris visible on the property, while only 31 percent of the Bank of America properties in predominantly white neighborhoods had trash visible on the property. 37 percent of the Bank of America properties in communities of color had unsecured or broken doors, while only 16 percent of the Bank of America properties in predominantly white neighborhoods had unsecured or broken doors. 49.6 percent of the Bank of America properties in communities of color had damaged, boarded, or unsecured windows, while only 23.5 percent of the Bank of America properties in white neighborhoods had damaged, boarded or unsecured windows.
In Milwaukee, for example, recently profiled in the book "Evicted," the lawsuit cites 134 Bank of America REO properties. Of these 134 REO properties, 74 were located in African American neighborhoods, 21 were located in predominantly Latino neighborhoods, eight were located in predominantly nonwhite
neighborhoods, and 31 were located in predominantly white neighborhoods. 83.9% of the REO properties in predominantly white neighborhoods had fewer than five maintenance or marketing deficiencies, while only 21.4% of REO properties in neighborhoods of color had fewer than 5 maintenance or marketing deficiencies. 78.6% of REO properties in neighborhoods of color had 5 or more marketing or maintenance deficiencies, while only 16.1% of the REO properties in white neighborhoods had 5 or more marketing or maintenance deficiencies. 8.7% of REO properties in neighborhoods of color had 10 or more marketing or maintenance deficiencies, while none of the REO properties in white neighborhoods had 10 or more marketing or maintenance deficiencies. Some including the Fair Finance Watch notice similar disparities in Milwaukee when it comes to the placement of the Bublr bike share program. Maybe Bank of America will want to put its name on the disparate network, as Citibank has in New York with disparately placed CitiBike.
neighborhoods, and 31 were located in predominantly white neighborhoods. 83.9% of the REO properties in predominantly white neighborhoods had fewer than five maintenance or marketing deficiencies, while only 21.4% of REO properties in neighborhoods of color had fewer than 5 maintenance or marketing deficiencies. 78.6% of REO properties in neighborhoods of color had 5 or more marketing or maintenance deficiencies, while only 16.1% of the REO properties in white neighborhoods had 5 or more marketing or maintenance deficiencies. 8.7% of REO properties in neighborhoods of color had 10 or more marketing or maintenance deficiencies, while none of the REO properties in white neighborhoods had 10 or more marketing or maintenance deficiencies. Some including the Fair Finance Watch notice similar disparities in Milwaukee when it comes to the placement of the Bublr bike share program. Maybe Bank of America will want to put its name on the disparate network, as Citibank has in New York with disparately placed CitiBike.
At the UN on June 4, when Citigroup managing director Michael Eckhart appeared, it was to talk about renewable energy with the UN Environment Program. Inner City Press asked Eckhart about Citigroup's role in the Dakota Access Pipeline.
He paused and admitted it was a lender, than said that the outcry against the pipeline, on indigenous human rights and other issues, was entirely unexpected. He said they had not protested early enough. Video here. But what about free prior informed CONSENT? Is silence consent? Or, as is too often the case, is the UN a place of hypocrisy?
As Inner City Press has shown, UNEP paid money to Volvo Ocean Races, and appears to have engaged in pay-for-prize with MoBikes. Inner City Press also asked about the UN bribery scandal in which China Energy Fund Committee - oil money - bribed UN President of the General Assembly Sam Kutesa, but CEFC remains in special consultative status with UN ECOSOC. Video here. We'll have more on this - and on Citigroup. Watch this site.
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