As Federal Reserve Rebuffs FOIA, Shields Capital One and M&T, AAd

By Matthew R. Lee

SOUTH BRONX, January 7 -- The Federal Reserve is covering up the performance of Capital One on commitments it made before getting approval for its protested acquisition of ING DIRECT.

  The Fed is withholding over 2200 pages responsive to an Inner City Press request under the Freedom of Information Act filed in April for "records 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."

  After delaying ruling from April until January 2012, Governor Jerome Powell on January 2 denied access to each and every page, calling it supervisory and confidential business information and saying that no "segregable" portion could be identified or released. The FOIA appeal denial is online here.

  How can the public assess the Federal Reserve's credibility in following up on the bank commitments it relies on in its own merger approval orders, if the Fed insists on withholding every single record?

  Inner City Press, along with other members of NCRC, has put this question to the Federal Reserve Board. Governor Daniel Tarullo, previously in charge of FOIA for the Fed, told Inner City Press he understood the problem.

  But nothing was done. Now pro-industry Governor Jerome "Jay" Powell, previously of Deutsche Bank and the Carlyle Group, has been put in charge of FOIA and as forseen he is denying appeal after appeal.

  After delaying more than 40 days to rule on Inner City Press' FOIA appeal of withholdings about the proposed merger of M&T and Hudson City Bancorp, challenged by NCRC members including ICP, Powell in a seven page ruling found that the Fed mis-invoked FOIA exemptions 6 and 8 -- but then refused to release the information, now invoking exemption 4. Seems they just make it up as they go along.

  In another pending merger case, from FirstMerit's submission to the Federal Reserve about Citizens Republic the Fed provided this to Inner City Press under FOIA:

"To facilitate secure email exchanges with the Federal Reserve, please see the attached file and link thatcontain instructions for registering with the Zix e-mail system. The web address is https:// WITHHELD"

  That is, even the way / address through which banks communicate with the Fed is withheld from the public.

  This is at odds, for example, with FOIA appeal responses obtained this year by Inner City Press from other Federal agencies, such as even, on a first appeal, the Broadcasting Board of Governors and its Voice of America.

   In other FOIA news, Inner City Press is a media amicusin this just filed brief in McBurney v. Young, No. 12-17 of the US Supreme Court.

  The advocacy, especially given the harm done to communities and taxpayers by the Fed's mis-regulation and bailouts, continues. On another pending merger, 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? Maybe they are communicating through the Fed's "secret" window. Watch this site.

As Deutsche Bank Evades Fed, Tarullo Airbrushes "Some Private Actors," Blurs FOIA and 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.

Senate to Consider for Fed Seat Powell of Deutsche Bank, Dodd Frank Evader

By Matthew R. Lee

SOUTH BRONX, March 28 -- When the Obama administration in December nominated Jay Powell formerly of Deutsche Bank to fill Kevin Warsh's seat on the Federal Reserve Board, Inner City Press called it putting a fox in charge of a hen house. Now on the eve of the Senate Finance Committee's hearing on Powell, the conflict of interest has gotten worse.

Deutsche Bank, Powell's former employer, recently moved to decertify at the Federal Reserve in order to evade the capital and other requirements of Dodd-Frank. Pressed on the matter on Capitol Hill last week, another Fed Governor Daniel Tarullo said he and the Fed would be looking into this.

But why put a former Deutsche Bank official on the Federal Reserve Board at this time? Would Powell recuse himself? He should be asked that by the Senate Finance Committee. But will he be?

Meanwhile Kevin Warsh who left the Federal Reserve Board in April appeared last night spinning on the Charlie Rose show. Click here to view.

Inner City Press through a Freedom of Information Act request showed that Warsh before leaving the Fed traveled to Beijing and engaged in "ex parte" communications with the Chinese government about ICBC's protested application to acquire Bank of East Asia. This is what the "designated Wall Street representative" on the Fed Board is supposed to do?

Nothing was said about Warsh's current employment. Conflicts of interest of former and prospective Federal Reserve Board governors are wildly under-covered, even in this time of Occupy Wall Street. This should end - watch this site.