By Matthew Russell Lee, Patreon Maxwell Book
BBC - Guardian UK - Honduras - ESPN
FEDERAL COURT, Oct 15 – Amid US Treasury Department and Federal Reserve partial reactions to the war on Ukraine, and near total inaction on fair lending and the closure of branches in low income US communities, the agencies scheduled a public meeting on the US Bank - Mitsubishi UFG Financial Group proposed merger on March 8.
As often happens in such meeting, a variety of bank grantees Zoomed in to support the merger. Other grassroots activists opposed it.
Fair Finance Watch, with Inner City Press as always on the FOIA, raised fair lending issues, US Bancorp compliance issues and something new - the war on Ukraine, and MUFG's continued business in Russia, see below.
Now, talk about burying or hiding the lede -- the Federal Reserve on October 14 sent Fair Finance Watch a letter saying it had approved the $8 billion merger of US Bank and MUFG, "order attached." But there was no order attached. And none was listed on the Board's website - except, it was hidden in an announcement about a comment period on a generic regulatory proposal. This is not public notice and does not set the 15 day waiting period to request reconsideration running....
After the hearing, "Senator Bob Menendez (D-N.J.), a senior member of the Senate Committee on Banking, Housing, and Urban Affairs, joined Sens. Sherrod Brown (D-Ohio), Chairman of the Banking Committee, Elizabeth Warren (D-MA), Catherine Cortez Masto (D-NV), and Chris Van Hollen (D-MD) in sending a letter to Andrew Cecere, CEO of U.S. Bank, requesting information about the bank’s use of consumer data to open unauthorized bank accounts. The letter comes after the Consumer Financial Protection Bureau (CFPB) fined the bank $37.5 million for illegally accessing consumers’ credit reports to open fake checking and credit accounts, accrue fees, and increase profits." Are the Fed and OCC just going to pretend this hasn't happened? The comment period should be reopened.
Fair Finance Watch previously commented: "U.S. Bank in 2020 in New York State made only 26 mortgage loans to African Americans, while denying more, fully 66 applications from African Americans. By contrast, it made 842 loans to whites while denying less, only 567 applications from whites. Fair Finance Watch has identified similar disparities in Florida, Michigan and elsewhere.
Mitsubishi UFJ Financial Group's bank in Oregon in 2020 made only ONE mortgage loan to and African Americans, while denying more, two applications from African Americans. By contrast, it made 196 loans to whites while denying fewer, only 55 applications from whites.
These disparities should not just result in a Fed footnote that the data cited by Fair Finance Watch is accurate but HMDA data is not probative. The incoming Governors should go on the record on this before the Board rules.
There are branch closing issues that should be addressed.
There is another issue which Inner City Press hereby timely raises to the Federal Reserve Board: the continued business with and in Russia by Mitsubishi UFJ Financial Group, which we confirmed on the bank's website just before this testimony. Mitsubishi UFJ Financial Group's website says, "MUFG's presence in Russia started in Moscow in 1992, through a Representative Office. Our presence expanded significantly through the establishment of a Russian subsidiary, ZAO Bank of Tokyo-Mitsubishi UFJ (Eurasia), by the sole shareholder, The Bank of Tokyo-Mitsubishi UFJ, Ltd., on 29 May 2006. On 14 October 2015, the name of ZAO Bank of Tokyo-Mitsubishi UFJ (Eurasia) was changed to AO Bank of Tokyo-Mitsubishi UFJ (Eurasia). The Bank of Tokyo-Mitsubishi UFJ Ltd. was renamed to MUFG Bank Ltd., effective April 01, 2018. In line with such change the name of AO Bank of Tokyo-Mitsubishi UFJ (Eurasia) was changed to AO MUFG Bank (Eurasia) on 03 April 2018. AO MUFG Bank (Eurasia) has a presence in Moscow and Vladivostok."
This is troubling, and must be addressed under the Bank Holding Company Act's managerial and financial if not moral factors. Other large banks under Federal Reserve supervision still bragging about their presence and business in Russia including Citigroup and HSBC.
But what the Fed asked questions on April 14, the day after Janet Yellen inveighed against other countries' banks still in Russia, the Fed did not include the issue. Here are some:
"1. On November 3, 2021, and January 13, 2022, staff requested copies of the executed Transitional Services Agreement and the Reverse Transitional Services Agreement (“Agreements”), including schedules A and B to each of the Agreements, when available. Provide a copy of the final Agreements, including schedules A and B to each of the Agreements. Further, if final versions of these Agreements are unavailable, staff requests a detailed summary of each of the Agreements and the accompanying schedules, including a list of each service that would be provided pursuant to each of the Agreements. The January 26, 2022, Additional Information (“AI”) response stated that schedules A and B to the Agreements would be available by March 2022, and Confidential Exhibit A to the January 26, 2022, AI response lacked the level of detail necessary for staff to understand the Agreements and complete the record. Provide the final versions of these Agreements, including accompanying schedules, when available.
2. In the March 24, 2022, response to adverse comments, USB states that “USB has already planned for growth in its LIHTC investment activity and expects that the combined organization will make more (rather than fewer) LIHTC investments following the Proposed Transaction.” Provide quantitative information detailing how the transaction is expected to result in additional LIHTC investments relative to the banks operating independently, including the LIHTC investments of the banks over the past three years and the anticipated level of LIHTC investments for the three years following the transaction. Provide the information nationally and for California.
3. In the November 18, 2021, AI response, USB stated that “decisions regarding the anticipated community development lending, investment, or service activities of the combined organization are subject to USB’s ongoing discovery efforts, integration assessment activities and continued due diligence of Union Bank’s community development program.” Provide an update on the status of the assessment of Union Bank’s community development program and indicate any community development activities of Union Bank that are expected to be discontinued after the transaction. Discuss any products or services that would be offered to customers of Union Bank that are not currently offered by Union Bank.
4. The November 18, 2021, AI response states that “[f]inal decisions regarding the retention of Union Bank product offerings remain subject to USB's ongoing discovery efforts.” To the extent decisions have been made, indicate any Union Bank products to be discontinued. Indicate the anticipated timing for final decisions to the extent the review is not complete.
5. Describe in more detail the branch closure mitigation strategies discussed in the March 24, 2022, response to comments. Indicate whether those or any other mitigation strategies would be applied to closures occurring as a result of the proposed transaction.
6. Indicate whether the “Digital Discovery Centers” discussed in the January 9, 2022, response to comments would be offered at Union Bank locations. To the extent applicable, discuss how they would be offered to customers of closing branches after the merger. Discuss generally how online, mobile, or ATM services would be offered to customers of closing branches.
7. Discuss whether the merger is expected to result in expanded credit availability to low- and moderate-income (“LMI”) borrowers, LMI communities, majority-minority borrowers, and majority-minority communities relative to each bank operating independently.
8. The March 24, 2022, response to comments states that “USB maintains credit policies specifically designed to allow access to financing for Native American borrowers on tribal lands.” Elaborate on these credit policies."
The Federal Reserve must act on this immediately -- Inner City Press is requesting this be raised to the new / nominated Governors at the earliest time, along with recent rubber stamping by Federal Reserve Banks, which brag of not being government agencies, of bank mergers including involving banks with Needs to Improve CRA ratings, like Berkshire Bank. So too should the record of Toronto Dominion, among others. But the MUFG - Russia / Ukraine issue is most pressing, on this application.
This was not addressed (yet?) by MUFG's Kevin Cronin and Julius Robinson nor USB's CDEO Andrew Cecere nor Reba Dominski.
The regulators present included Ben Olson Fed Presiding Officer; Donna M. Murphy OCC Presiding Officer; Fed's Vaishali Sack, Susan Motyka, Dafina Stewart, Chris Wangen FRB of Minneapolis; OCC's Barry Wides, Andrew Moss, Ron Pasch and Jason Almonte.
Close readers may remember a previous Inner City Press FOIA report: on May 6, 2020 Inner City Press belatedly received some responsive documents from Treasury's OCC,, but even on then-Comptroller Joseph Otting's schedule entries were redacted or in some cases unreadable - including the names of banks and CEOs met with. For example on January 24, 2020 there was a flurry of calls to bank CEOs, but only Wells Fargo and MUFG were legible.
What did MUFG says? What did the Comptroller say? What will the Fed say? Watch this site.
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