By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - The Source
SOUTH BRONX, Nov 29 – 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 got a U.S. bank charter.
Now to the the FDIC, "Multi-Bank" has applied for a non-community bank charter, while redacted / blacking out much of its application. Inner City Press / Fair Finance Watch has submitted a FOIA request to the FDIC: "This is a FOIA request for (all of) the overly redacted "public" application of Multi-Bank Application For DeNovo State Bank in Florida. Inner City Press has seen the redacted version, which withholdings from the public and press information about those involved and their plans. The entire application should be provide, along with all of the FDIC's communications with these applicants for the past year (including for preparation of public comment - it should be expedited and provided on a rolling basis)."
The context, as the FDIC has been told: the FDIC, Fed and Florida OFR should review the SEC’s Investment Adviser Public Disclosure page here to see there are 332 individuals listed for this firm, many with “Disclosures.” The web site states that these Disclosures “can be customer complaints or arbitrations, regulatory actions, employment terminations, bankruptcy filings and certain civil or criminal proceedings they were part of.” Many, perhaps most, of these disclosures may be irrelevant and many of the listed employees may no longer be working at MBS. However, since such Disclosures may include “civil or criminal proceedings” and this firm will be the primary asset of the proposed Multi-Bank, the FDIC, Fed, and Florida OFR should examine each Disclosure in the same way it examines the background of planned directors and employees of a proposed Bank.
The FDIC, Fed, and Florida OFR should also review FINRA’s “BrokerCheck” page here for the firm in addition to that for its employees. That page shows that the firm had four (4) “Disclosure Events” defined as “certain criminal matters, regulatory actions, civil judicial proceedings and financial matters in which the firm or one of its control affiliates has been involved.” Again, these disclosure events may be irrelevant and outdated, but the FDIC, Fed, and Florida OFR should review these and similar items as part of their due diligence process.
The FINRA site notes the following four disclosure events for the firm, and these are reproduced in their entirety at the end of this comment: 1. FINRA action initiated on 4/10/2017 and resolved with a censure and fine. 2. FINRA action initiated on 2/5/2015 and resolved with a censure and fine. 3. Vermont Securities Division action initiated on 6/12/1997 and resolved with consent order and payment of administrative costs. 4. State of Alabama action initiated on 6/16/1994 and resolved with consent order and payment of administrative costs. Even though these four reported disclosure events go back many years to 1994 and some of them may be relatively minor administrative issues, the fact is that banking is the most heavily regulated industry in the nation, and a bank must be held to a much higher regulatory standard than a broker-dealer. For that reason, the FDIC, Fed, and Florida OFR must review all such published and unpublished regulatory actions involving this firm and its employees as a condition of approval for the bank and BHC."
Meanwhile Inner City Press' requests under the Freedom of Information Act into Acting OCC Comproller Brian P. Brooks' conflicts of interest in the fintech and crypto-currency world have yet to be fully answered.
Now, with Brooks cynically nominated to be confirmed (to test out how fast he could be fired under Section 2 of the National Bank Act), Brooks has gone whole hog, inviting any and all crypto firms into the national bank world through the trust bank loophole, without regard to CRA or anything else. There is Anchorage, represented by Dana Syracuse through the revolving door from the NYS Department of Financial Services; there is Figure. All this must be opposed - and will be.
And so now 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 at January 10 - such charters would be illegitimate, gifts by a lame duck. 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.
They have yet to do so. Lame duck. Rush job, rubber stamp. Watch this site.
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