As Valley National Bank Redlines and Redacts, Office of the Comptroller of the Currency's Runaround on FOIA Explifies Regulatory Capture

By Matthew R. Lee, FOIA series

NEW YORK, August 4 -- Some have wondered how large US national banks were allowed to get into predatory lending, why community groups' warnings were ignored, and the meltdown happened.  Well, here is a partial explanation.

   US bank regulators, then as now, find way to exclude public review. Take for example the US Office of the Comptroller of the Currency, part of the Department of Treasury, and its recent denial of access to bank information under the Freedom of Information Act, and on appeal.

  Beginning in May, Inner City Press began requesting information from the OCC about Valley National Bank and its proposed acquisition of Florida-based 1st United Bank. 

  Fair Finance Watch and other NCRC members showed that Valley National's lending was disparate:  In 2012 in the New York City MSA for refinance loans, Valley National made 2152 such loans to whites and only 38 to African Americans -- entirely of keeping with the demographics and demographics of home ownership in the New York City MSA. Valley National denied 67% of such applications from African Americans, versus only 34.5% of such application from white.

  A first Inner City Press FOIA request about Valley National, the OCC's Rosalye Settles said she mis-understand, putting the entire request on hold then threatening to dismiss it.

  On June 8, Fair Finance Watch filed a second comment, including that:

Valley National has branches only below 88th Street in Manhattan (in which, intriguingly, a "Yellowbrick Real Estate Capital" breaks into the top five in pre-foreclosures).

  Valley National has no branches in Harlem, Washington Heights or The Bronx, predominantly African American and Latinos, low and moderate income areas.

  In Queens, it's Middle Village and Kew Gardens. In Brooklyn, Valley National's branches are along Ocean Parkway and in Bay Ridge. What about East New York, Brownsville, Bushwick and Bedford Stuyvesant?

  On July 16, Valley National submitted a response to the OCC, giving the OCC a full copy and a "redacted" or partially blacked out copy, as provided to Inner City Press,here.
  
  Inner City Press submitted a FOIA request to the OCC challenging the redactions. But the OCC's Marilyn Burton denied the FOIA request, saying it did not request any documents. Click here for the OCC's FOIA denial.

 So Inner City Press submitted an appeal, linking to exactly the redacted documents as Valley National provided to the OCC. But the OCC Frank Vance ruled that this was not an appeal, copy here. All of this while the OCC could haul off and rubber stamp Valley National's merger application any day.

  This is why banks get over. And Fair Finance Watch, and Inner City Press, aim to expose and end these practices. Watch this site.

   

Citigroup's Subprime Settlement on the Cheap A New Predatory Stage, Redlining Like Valley National Bank's Allowed

By Matthew R. Lee

NEW YORK, July 14 -- As Citigroup settles charges for its subprime lending for $7 billion dollars, the amount and the how the settlement is divided is but a new predatory stage.

  Less than 40% of the settlement even arguably goes to consumers who were wronged. The US government itself takes more than half of the money, an even higher percentage than in JPMorgan Chase's $13 billion settlement (in which the $4 million for consumer relief was double the $2 billion the Justice Department took).

  As Inner City Press and Fair Finance Watch repeatedly showed, including to the Federal Reserve, the moment Citicorp and Travelers merged, Citi became a predator. CitiFinancial based compensation on how badly consumers could be gouged, including selling credit insurance of no possible value to the purchaser.

  The Federal Reserve, based on this, imposed a $75 million fine which did nothing to stop Citi's behavior. After the meltdown and bailout, now this is a scam settlement meant to give the impression of a government crack-down. It is not.

   Even while the mega-banks take a pause from acquisitions, needed watchdog work continues on mid-sized banks like Valley National, whose attempt to buy into affluent Florida markets through 1st United Bank is subject to a Community Reinvestment Act challenge and pending Freedom of Information Act appeal by Inner City Press.

  Why were and are communities of color susceptible to predatory lending? Because they are redlined by FDIC-insured banks like Valley National Bank. 

  In the New York City Metropolitan Statistical Area in 2012, the most recent year for which Home Mortgage Disclosure Act data is publicly available, for refinance loans, Valley National made 2152 such loans to whites and only 38 to African Americans -- entirely of keeping with the demographics and demographics of home ownership in the New York City MSA. Valley National denied 67% of such applications from African Americans, versus only 34.5% of such application from white.

   Valley National Bank's branch pattern in New York City is indicative of redlining: in Manhattan, nothing 88th Street, no branches in Harlem, Washington Heights or The Bronx, predominantly African American and Latinos, low and moderate income areas. In Queens, it's Middle Village and Kew Gardens. In Brooklyn, Valley National's branches are along Ocean Parkway and in Bay Ridge. What about East New York, Brownsville, Bushwick and Bedford Stuyvesant?

  Along with groups in NCRC, Fair Finance Watch has shown a similar pattern in New Jersey, where in the Newark MSA for refinance loans in 2012, Valley National Bank made 2338 such loans to whites and only 44 to African Americans.

  But these patterns are not acted on -- rather, longstanding predatory lending like Citigroup's is laundered into a smoke and mirror settlement that is, in context, impunity. Watch this site.