Fair Finance Watch Protests Hanover Bank Bid On Savoy Bank As Bronx and Brooklyn Harmed

By Matthew Russell Lee, Patreon

BBC - Guardian UK - Honduras - ESPN

SOUTH BRONX, NY, Dec 5 – Even amid the Coronavirus pandemic, U.S. banks keeps seeking to merge and expand, with less and less oversight.   Fair Finance Watch, with Inner City Press on the FOIA, has filed a Community Reinvestment Act protest:

Federal Deposit Insurance Corporation Attn: Frank Hughes, Regional Director and Robert P. Cordeiro, Scott D. Strockoz 350 Fifth Avenue, Suite 1200 New York, NY 10118-0110   Re: Timely First Comment on Applications by Hanover to acquire Savoy Bank.  Dear Regional Director Vogel and others at the FDIC: 

 This is a timely first comment opposing and requesting an extension of the FDIC's public comment period on the Applications by Hanover to acquire Savoy Bank.   

   The applicant Hanover in the New York in 2019 made 67 home loans to whites and only THREE to African Americans. Note that Hanover's CRA assessment area includes The Bronx, and Brooklyn. 

  Hearings are requested on that; they may also touch on the financing of the proposed deal: "“We are pleased to announce the successful completion of our subordinated debt offering,” said Michael Puorro, Hanover’s Chairman and CEO. “This offering is directly aligned with Hanover’s strategic plan of high growth and high profitability, which continues to create significant shareholder value. The proceeds from this transaction provide us with the necessary capital to finance our recently announced partnership with Savoy Bank, as well as the ability to continue to compete in an exciting marketplace and to execute upon our longer-term strategic goals.”  Stephens Inc. acted as lead placement agent for the offering, with PNC Financial Services Group, Inc. acting as co-placement agent. Windels Marx served as legal counsel to Hanover and Covington & Burling LLP served as legal counsel for the placement agents." 

The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved  From the FDIC: Matthew R. Lee, Esq. Fair Finance Watch P.O. Box 20047 New York, New York 10017 Dear Mr. Lee:  We received your e-mail dated November 28, 2020, concerning Hanover Community Bank’s applications to acquire Savoy Bank. We reviewed your correspondence in accordance with the guidelines of 12 C.F.R. Section 303.2(c) and 303.2(l), and consider it a protest for the purpose of the applications. We forwarded your comments to the applicant

That is,

 Michael P. Puorro Chairman and Chief Executive Officer Hanover Community Bank 2131 Jericho Turnpike Garden City Park, New York 11040 Subject: Community Reinvestment Act Protest and the Removal of Application from Expedited Processing for Interagency Bank Merger Act Applications to acquire/merge with Savoy Bank, New York, New York Applications Tracking No. 20201214 and 20201215 Dear Mr. Puorro:  We are writing in reference to the enclosed e-mail correspondence that we received from Matthew R. Lee of Inner City Press/Fair Finance Watch, concerning your institution’s applications to acquire Savoy Bank. We reviewed the e-mail correspondence in accordance with the guidelines of 12 C.F.R. Section 303, and deemed it a Community Reinvestment Act (CRA) protest for the purpose of the applications. The subject e-mail raises issues regarding the bank’s record of lending to African American persons. The anticipated time and research required to investigate these issues has necessitated the removal of your applications from expedited processing.  You may provide a written response on the protest to me within ten business days after the date of this letter, in accordance with 12 C.F.R. Section 303

***

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Otting Appalled By Community Reinvestment Act Questions Amid FOIA Complaints by Inner City Press

By Matthew Russell Lee, Patreon ThreadBBC - Guardian UK - Honduras - CJR - PFT

SOUTH BRONX / DC, Jan 29 –   The current US Comptroller of the Currency Joseph Otting belatedly took questions from House members on January 29 about his Community Reinvestment Act proposal - and quickly declared the questions "appalling."

   Otting began by insisting he will not provide any more than the 60 day comment period - this so that his proposal could avoid the Congressional Review Act. It went downhill from there. Fair Finance Watch live-tweeted thread here:

Otting begins by telling Rep Waters he will NOT extend the comment period.   The reason? As Inner City Press has reported, to avoid Congressional Review Act if/when Republicans lose the Senate

Otting used his five minutes to play up where he was born in Iowa, and to use his spouse. Now he says the Federal Reserve not signing on to his proposal is just Lael. That's not how the Federal Reserve Board works

Will Otting be asked about the counterfeit comments that went in to support his selling of OneWest to CIT? About his lawless denial of #FOIA requests and fee waiver requests since at OCC? To refusing public comment on 5/3 charter conversion, and Chinatown FSB?

 Now Rep Waters asks "given all of the work you did with OneWest Bank, you have never observed discrimination?"  Otting: My family has told me about it.  Waters: Today I'm telling you about it.

Now Rep McHenry starts by saying doesn't CRA need to be modernized since 1995?  But does that mean let Otting weaken it? As he already has, ignoring public comments? That's key here: CRA is enforced on public comments on merger applications and Otting buries those

 Rep Velasquez just asked Otting if he will share info with the Committee. Otting dodges, then says, "I'd come by your office, but not to the public."  Otting is also destroying FOIA compliance at OCC.  Rep Velasquez says, Let's subpoena it. And release to public? Rep Sherman tells Otting his refusal to extend the comment period show so much contempt including for the Committee that why should they listen to him on LIBOR? Why indeed.

Otting brags that OCC and FDIC control 85% of banking. But CRA is enforced on mergers, most of which have bank holding companies so the applications go to the Fed. And Otting just throws CRA comments into the garbage can, is our experience...

Rep. Scott tells Otting that "even Banks" are concerned about his proposal, that regulation cannot be "my way or the highway." Tells Otting he misrepresented the Federal Reserve's position, and skipped previous hearing. Asks, Why are you doing this? #OneWest

 Otting: "I find somewhat appalling some of the comments you have made to me... How many years do you want this to go on?" For what to go on - the already not strong enough CRA process? Or Otting's world of no-FOIA, no merger comments, retaliation and lawlessness?

 Otting has never visited the office of Rep Clay, tells him that the race discrimination issues he has raised are not relevant under the Community Reinvestment Act.  Oh.

Otting cashed out of his position with OneWest Bank in California by overseeing fake comments in favor its acquisition by the CIT Group.

   Then, emboldened, he devoted the Office of the Comptroller of the Currency to weakening or destroying the Community Reinvestment Act which provides for the public process that he subverted with fake comments.

   Inner City Press, which along with CRC opposed the merger and then pursued a Freedom of Information Act request for all documents about Otting's fraud, soon found its and Fair Finance Watch's comments to the OCC being rejected, or ignored, or returned. 

  While Inner City Press' FOIA requests get fee waivers from the Federal Reserve and a range of agencies in the US and beyond, Otting's OCC suddenly started denying them, hindering access to the merger applications on which CRA is enforced.   

Otting is trying to push through this CRA-killing proposal on a short comment period, cognizant of the other CRA, the Congressioal Review Act. But it is obvious that even banks want more time.

On January 26, in advance of Otting's belated January 29 House of Representatives appearance, Inner City Press / Fair Finance Watch submitted a formal comment, including: January 26, 2020  Re: Docket ID OCC-2018-0008 &  - total opposition to OCC/FDIC plan to weaken CRA 

To whom it may concern at the OCC and FDIC: On behalf of Fair Finance Watch, and Inner City Press, and in my personal capacity, this is a timely comment opposing the proposal by Comptroller Joseph Otting and the FDIC to weaken the CRA.

Enforcing the CRA including through commenting to the Federal Reserve and FDIC, and OCC under previous Comptrollers, the results have been new bank branches in the South Bronx, and lending and consumer protection commitments well beyond.  Some advocacy, from 2001, here;  2002 here (Wells Fargo);  jump cut to 2015, here (due to 5000 character restriction)  and more  

But since Otting became Comptroller, we have seen timely comments ignored, and been denied access to bank merger applications by a retaliatory imposition of FOIA fees. The Federal Reserve and other federal agencies, like the OCC pre-Otting, grant Inner City Press FOIA fee waivers. Under Otting, the OCC does not.

On Chinatown FSB, the OCC refused to consider a timely comment. The OCC unilaterally determined not to accept public comments on a major bank's charter conversion application, which it rubber stamped.  This has been rogue-like behavior. It is in keeping with our experience with Otting when, as head of One West, he oversaw false comments submitted to regulators to support One West's merger with CIT. People wrote it and said they had not commented; the regulators asked Otting's OneWest's counsel - and there the trail of evidence ends, for now. See, for the record (including the record on this timely request that Otting be recused and the proposal withdrawn), here.

  In 2020 we are aware of the OCC calling community groups looking to be able to say they didn't authorize their sign-ons. Well, we proudly signed onto NCRC's letter(s). And for now, in advance of Otting's January 29 House appearance, we re-affirm these views:   Under the NPRM, the definition of affordable housing is relaxed to include middle-income housing in high-cost areas. In addition, housing is assumed to be affordable if lower-income people can afford to pay the rent without verifying that lower-income people will be tenants. Essential infrastructure such as bridges is added as an activity eligible for community development but clearly estimating the benefit to LMI populations of such large-scale projects is difficult and likely to result in ratings inflation as well as diverting funding from community development directly in LMI communities...

Absurdly, the proposal would grant CRA credit for work on stadia, for example. The proposal must be withdrawn.  In short, we are totally opposed to Otting's and the FDIC's proposals and think for the reasons set forth above, including actions at OneWest and more recently trying to intimidate community groups, Otting must be recused and the proposal withdrawn. We will have further comments.  Matthew R Lee Fair Finance Watch (and Inner City Press) New York. Watch this site. 

After Banker Calk Pled Not Guilty Inner City Press Fraud Qs to OCC Which Says CRA and HMDA Are Up to Banks

By Matthew Russell Lee, Video, Alamy photos

SDNY COURTHOUSE, May 28 – Steven M. Calk of FDIC-regulated Federal Savings Bank was presented and arraigned on May 23 for financial institution bribery for corruptly using his position with FSB to issue $16 million in high-risk loans to Paul Manafort in a bid to obtain a senior position with the Trump administration, namely Undersecretary of the Army.

  Back on May 23 Magistrate Judge Debra Freeman in the U.S. District Court for the Southern District of New York accepted the government's proposal of $5 million bond with no co-signer (although that is usually required for moral suasion) and travel allowed throughout the United States (though more defendants are usually confined to the Soutern and Eastern District of NY and one other district). Money talks.

  Afterward in front of the SDNY courthouse Inner City Press asked Calk's lawyers Daniel Stein and Jeremy Margoles about Manafort saying he had misstated his financial situation to get the FSB loans. When did Calk know? They did not answer. Video here, Facebook video here.  Inner City Press' Alamy photoshere.

  On May 23, still from the SDNY courthouse covering other cases including one involving the death penalty, Inner City Press reportedfinding no U.S. Home Mortgage Disclosure Act data for "Federal Savings Bank." But there's more. 

The Federal Savings Bank's website, while providing a generic link to the FDIC, and a statement "Member FDIC," has no link for the U.S. Community Reinvestment Act. (Nor does it mention the indictment of Stephen Calk, simply listing his brother John Calk now as CEO and Vice Chairman. Who is the chairman?)

  It lists a loan production office on Avenue J in Brooklyn, and two deposit taking braches in Illinois. Did it see some exemption from the CRA and other consumer protection laws? From fair lending laws? 

  Earlier on the morning of May 24 Inner City Press asked the FDIC, "Having covered yesterday's arraignment of the Chairman of The Federal Savings Bank in the SDNY courthouse, including the FDIC's involvement, I checked the bank's website and found "Member FDIC" but no mention of the Community Reinvestment Act."

  The FDIC's spokesperson David Barr, to his credit, responded quickly, writing to Inner City Press: "The Federal Savings Bank, Chicago, is regulated by the Office of the Comptroller of the Currency. They would be responsible for CRA and regulatory oversight. You should contact the OCC for more information."

  Now the OCC under Comptroller Joseph Otting has done everything possible to block the release of information, denying FOIA fees waivers and expedited treatment, refusing comments. But for now online the OCC has said this about The Federal Savings Bank: "While TFSB originated a substantial majority of its loans outside of its AAs; the bank’s business strategy is to operate as a mortgage banking entity with a nationwide presence and market place. Taking the bank’s business strategy into consideration the bank’s performance under this lending criterion is deemed reasonable." Reasonable? Bribery, too, seems to have been part of its business strategy, right under the nose of the OCC of Otting. 

  Before 2 pm on May 24 Inner City Press in writing asked Otting's OCC: "This is a Press question for the OCC, from Inner City Press... Please confirm that The Federal Savings Bank is subject to HMDA, and/or if it is below a threshold, as I can find no data in its name on FFIEC.gov. Also, please today provide as an OCC response to the Press this OCC-regulated bank's CRA public file and other information in the OCC's possession concerning the bank's CRA and fair lending performance.   Is it normal for a bank not to mention these things on its website, nor to provide any link to its actual regulator, the OCC, but only to the FDIC?     Please explain what steps the OCC is taking beyond Stephen Calk no longer being the CEO. What about his brother?"

  More than three hours later, even to the questions at the end, the OCC had only provided this:   "We are reviewing your questions, but we may not be able to respond by your deadline.     Regards,  Stephanie        Stephanie Collins  Manager, Media Relations  Public Affairs Operations  Office of the Comptroller of the Currency." This is the same OCC which has delayed FOR MONTHS providing basic information about a merger it has now already rubber stamped. 

  On the morning of May 28 Inner City Press received from the OCC a statement that The Federal Savings Banks is subject to HMDA - how they are listed in the HMDA database remains a question - and this: "Question:  Is it normal for a bank not to mention these things [CRA and HMDA] on its website, nor to provide any link to its actual regulator, the OCC, but only to the FDIC?  [OCC answer:] This question is best directed to the bank."

  So wait: Otting's OCC leaves it entirely up to the banks it ostensibly regulates whether to mention on their website and presumably branches CRA, HMDA or even the OCC where consumers could complain? We'll have more on this. 

  Stephen Calk was quoted, at least in 2012, opposing regulation: "As Mr. Stephen Calk writes in the September 7, 2012 edition of Origination News: “Basel III is designed to level the playing field among major banking institutions that operate internationally. Force-feeding these same rules to community banks in the United States is unnecessary and in fact counter-productive, particularly in the current economic environment.” Basel III is one thing. But no Community Reinvestment Act?

The Federal Savings Bank lists locations - and bankers - in       Arizona - Scottsdale California - Irvine Colorado - Fort Collins Delaware - Selbyville Florida - Sarasota Illinois - Chicago Illinois - Lake Forest Illinois - Oak Brook Illinois - Park Ridge Indiana - Bloomington Indiana - Indianapolis Kansas - Overland Park Louisiana - Laplace Maryland - Annapolis Maryland - Timonium CD Massachusetts - Lawrence New Jersey - Hackensack New Jersey - Lakewood New York - Brooklyn New York - Melville New York - New York New York - Queens North Carolina - Raleigh Ohio - Columbus Rhode Island - South Kingstown Tennessee - Nashville Virginia - Alexandria Virginia - Fredericksburg Virginia - Newport News Virginia - Richmond Virginia - Vienna Virginia - Warrenton...  We'll have more on this.

After Calk Pled Not Guilty Inner City Press Asked Of Fraud Finding No CRA On Bank Website

By Matthew Russell Lee, Video, Alamy photos

SDNY COURTHOUSE, May 24 – Steven M. Calk of FDIC-regulated Federal Savings Bank was presented and arraigned on May 23 for financial institution bribery for corruptly using his position with FSB to issue $16 million in high-risk loans to Paul Manafort in a bid to obtain a senior position with the Trump administration, namely Secretary of the Army.

  Magistrate Judge Debra Freeman in the U.S. District Court for the Southern District of New York accepted the government's proposal of $5 million bond with no co-signer (although that is usually required for moral suasion) and travel allowed throughout the United States (though more defendants are usually confined to the Soutern and Eastern District of NY and one other district). Money talks.

  Afterward in front of the SDNY courthouse Inner City Press asked Calk's lawyers Daniel Stein and Jeremy Margoles about Manafort saying he had misstated his financial situation to get the FSB loans. When did Calk know? They did not answer. Video here, Facebook video here.  Inner City Press' Alamy photoshere.

  On May 23, still from the SDNY courthouse covering other cases including one involving the death penalty, Inner City Press reportedfinding no U.S. Home Mortgage Disclosure Act data for "Federal Savings Bank." But there's more. 

The Federal Savings Bank's website, while providing a generic link to the FDIC, and a statement "Member FDIC," has no link for the U.S. Community Reinvestment Act. (Nor does it mention the indictment of Stephen Calk, simply listing his brother John Calk now as CEO and Vice Chairman. Who is the chairman?)

  It lists a loan production office on Avenue J in Brooklyn, and two deposit taking braches in Illinois. Did it see some exemption from the CRA and other consumer protection laws? From fair lending laws? The FDIC website provides no insight.

  Stephen Calk was quoted, at least in 2012, opposing regulation: "As Mr. Stephen Calk writes in the September 7, 2012 edition of Origination News: “Basel III is designed to level the playing field among major banking institutions that operate internationally. Force-feeding these same rules to community banks in the United States is unnecessary and in fact counter-productive, particularly in the current economic environment.” Basel III is one thing. But no Community Reinvestment Act?

The Federal Savings Bank lists locations - and bankers - in       Arizona - Scottsdale California - Irvine Colorado - Fort Collins Delaware - Selbyville Florida - Sarasota Illinois - Chicago Illinois - Lake Forest Illinois - Oak Brook Illinois - Park Ridge Indiana - Bloomington Indiana - Indianapolis Kansas - Overland Park Louisiana - Laplace Maryland - Annapolis Maryland - Timonium CD Massachusetts - Lawrence New Jersey - Hackensack New Jersey - Lakewood New York - Brooklyn New York - Melville New York - New York New York - Queens North Carolina - Raleigh Ohio - Columbus Rhode Island - South Kingstown Tennessee - Nashville Virginia - Alexandria Virginia - Fredericksburg Virginia - Newport News Virginia - Richmond Virginia - Vienna Virginia - Warrenton...  We'll have more on this.

  In the indictment press release, FDIC OIG Special Agent-in-Charge Patricia Tarasca said, “Today’s indictment charges Stephen Calk with misusing his position as Chairman and CEO of a bank for his own personal gain.  The FDIC Office of Inspector General remains committed to investigating cases where bank officials cause multimillion-dollar losses to a financial institution and undermine its integrity.” (The FDIC stands to be the lead regulator of BB&T whose money laundering enforcement action was just terminated by the Federal Reserve to facilitate merger with Suntrust, click here for that and Inner City Press' FOIA request and appeal.)

Exclusive: OCC of Otting Told ETRADE It Is Exempt From CRA Inner City Press Finds Under FOIA

By Matthew R. Lee, Exclusive

SOUTH BRONX, May 18 – The US Treasury Department is in a process to try to weaken and take the community out of the 1977 Community Reinvestment Act. Docket file here. The protagonist, akin to Scott Pruitt when he was at the US Environmental Protection Agency, is Comptroller of the Current Joseph Otting. On September 12 Fair Finance Watch (and on FOIA, Inner City Press) commented to the OCC, here. Now on October 11, more on Otting's assault on the CRA has become known. In April 2018 his OCC approved an application by E-Trade Saving Bank which Fair Finance Watch had challenged based on the bank having no fewer than six states rare "Needs to Improve" CRA ratings. 

FFW notedrare Needs to Improve ratings for the entire states of Arizona, Colorado, Florida, Georgia, Michigan and Oregon, and an undeserved “Satisfactory” for New York. Otting's OCC, after the approval, helpfully contacted E-Trade Bank to tell it that upon (Otting's) reflection, it was no longer even subject to the Community Reinvestment Act. 

 Back in October 2018 Inner City Press asked the OCC for documents about this under FOIA - while the OCC has sought to evade by accessing fees, to this day. But in May 2019 while withholding 1000 pages the OCC released to Inner City Press, like a needle in a hay stack, its June 16, 2018 letter from Assistant Deputy Comptroller for Midsize Bank Supervision William Russell to E*TRADE's Karl Roessner telling him that E*TRADE's banks are exempt from CRA, here. We'll have more on this.

 Inner City Press on October 11 raised the E-Trade (and another bank) issue into the record on the Advanced Notice of Proposed Rulemaking. Many more are resisting Otting, but Federal Reserve Bank of Cleveland President Loretta J. Mester on October 3 saidthat "the OCC, a part of Treasury, has put out an advance notice of proposed rule-making (ANPR) seeking comment on ways to modernize the CRA regulations. The Federal Reserve is also undertaking efforts aimed at ensuring that the CRA regulations continue to meet the goals of the legislation amid the evolving financial services environment" - with these as her footnotes for that: "Brainard, Lael, “Community Development in Baltimore and A Few Observations on Community Reinvestment Act Modernization,” Baltimore, Maryland, April 17, 2018a and Brainard, Lael, “Keeping Community at the Heart of the Community Reinvestment Act,” New York, NY, May 18, 2018b. Both of those Brainard speeches were before Otting's proposals. And since? In the docket file as of October 8 are 42 comments, now including the President of  First National Bank & Trust in Elk City, Oklahoma who writes, "I firmly believe that this form of oversite was meant for metropolitan areas and banks with multiple branches. There’s got to be a better way of monitoring and locating those banks that aren’t helping the population it serves. I would be surprised to find there are very many banks that fail the CRA examination." It's called grade inflation. On September 29 The Intercepthas dug into it, citing FFW's formal request that Otting recuse himself - and so here now are some of the Freedom of Information Act documents. On October 2 in the Senate Banking Committee, Otting insisted he is not trying to weaken the CRA; he called the ANPR an "Advanced Notice of Public Rulemaking" instead of Proposed. He said he met with 1100 individuals - still undisclosed - and expects five to ten thousand comments on the ANPR. (So far there are 33 listed but only 29 visible). Senator Sherrod Brown began by asking him indirectly about the blogs at CFPB of Eric Blankenstein. We'll have more on this. And this - as obtained by Inner City Press and fellow NCRC member CRC, here are more of the documents, for (this time) free download on Patreon. 

 On October 1 Inner City Press / Fair Finance Watch submitted the documents obtained under FOIA into the record before the OCC, stating that "These documents, which must be considered as part of this ANPR and any subsequent formal rulemaking, show that fraudulent comments supporting Otting's OneWest were submitted to the OCC - presumptively attributable to Otting.
The documents show that the OCC sought an explanation from Otting's / OneWest's outside counsel - and the OCC's and Justice Department's response to date reflect that no such explanation was ever provided. The OCC nevertheless approved the merger and even gave weight to the fraudulent comments. On this record we again insist that Otting be recused from this ANPR and any related rulemaking or proceedings. We have other substantive concerns about this ANPR but view the question of Mr Otting's recusal (and of with whom he has met, on which Inner City Press has another long-pending FOIA request) as threshold matter than must be addressed as quickly as possible."

 The FOIA document as provided by the OCC and US Department of Justice reflect that the OCC never followed up on its lone (and wan) question to Otting's counsel as Sullivan & Cromwell to explain the fraudulent comments. Nor did this counsel respond to questions from The Intercept's David Dayen, who reports: "AFTER A YEARLONG effort to obtain the information, which included ongoing litigation, the OCC made available 15 pages. They contain emails to and from David Finnegan, an OCC senior licensing analyst who was a point of contact for public comment on the merger.

Four individuals contended in emails to Finnegan that they never sent the comment letters supporting the merger. “This is to bring to your attention that I received an email from the office of OCC regarding a subject I am completely unaware of,” wrote one individual (the OCC redacted the emailers’ identifying information). “I DID NOT send the email below that you responded to. This is a fraudulent use of my email account.” The other three sent similar complaints.

The letter of support attributed to these individuals was identical to the letter posted at the OneWest Bank website.

Matthew Lee of Inner City Press expressed outrage at the fake comments. “There’s nothing more offensive of speech rights than artificially presenting someone as saying something you don’t believe,” Lee said. “You have the right to be silent. It’s so beyond the pale.”

FOIA Finds: OneWest CIT Ban... by on Scribd

Finnegan responded to these emailers, thanking them for letting him know. He also sent two emails to Stephen Salley, an attorney with Sullivan & Cromwell, who was representing OneWest in the merger. “FYI and review. We would appreciate any information you can provide regarding this submission,” Finnegan wrote to Salley on both occasions.

Presumably, Finnegan reached out to OneWest’s lawyer about the fake comments because they featured the same form letter that OneWest had written to encourage public support. But the two emails are the only record that OCC did any investigation of the fake comments. There is no reply from Salley or Sullivan & Cromwell to the OCC, at least not in written form. “By reaching out to the attorneys immediately, it suggests something serious, and yet there’s no follow-up that’s apparent whatsoever,” said Kevin Stein of the California Reinvestment Coalition...Olivia Weiss, a spokesperson for CIT, forwarded a request for comment to her colleague Gina Proia, who declined to comment. Salley did not respond when asked whether he or his law firm responded to the OCC....In his public comment for Inner City Press, Lee asked for Otting to recuse himself from the new rule-making, highlighting the fake comment controversy. “Public participation is key to CRA, on performance evaluations and crucially on bank merger and expansion applications,” Lee wrote. He added that it’s unclear whether the OCC has improved its processes to prevent fake comments from being submitted again in the CRA rule-making. The public comment period ends in November.

Otting is scheduled to appear at a Senate Banking Committee hearing on October 2, where his CRA push could be a topic of discussion." We'll have more on this Why didn't the OCC more seriously look into this fraud? What has been improved since? Shouldn't Otting be recused, as Fair Finance Watch has already timely requested? One analogy, also noted by The Intercept, is to the gaming of the FCC's process on net neutrality, when even Senator Jeff Merkley and Pat Toomey's identities were borrowed, as reported by the Washington Post's Hamza Shaban.  Unlike Otting to date, at least the FCC's Ajit Pai responded, if only to blame David Bray, as reported by Adam Jacobson in RBR. Otting simple refuses to answer - for now. From the Fair Finance Watch / Inner City Press comment: "Fair Finance Watch (and where applicable Inner City Press) appreciate the opportunity to comment on the Office of the Comptroller of the Currencys (OCC) Advance Notice of Proposed Rulemaking (ANPR) regarding the Community Reinvestment Act (CRA). CRA has leveraged significant amounts of loans and investments for low- and moderate-income communities.

We began enforcing the CRA in the South Bronx then beyond starting in 1994, in connection with the applications for mergers or expansions on which banks' records are considered. Numerous banks excluded the South Bronx and Upper Manhattan from their CRA assessment areas even though, as we proved, they collected substantial deposits from area residents. We got six banks to open branches and make lending commitments, in the Bronx and beyond.

We concerned that the OCC's proposal threatens to weaken CRA, see below. As as relevant here, we commented along with others on the CIT - OneWest proceeding, and were concerned both by OneWest's record under now-Comptroller Otting and by what emerged as the gaming of the system with pre-fabricated comments Otting openly solicited. We may comment in more detail on this later in his ANPR proceeding.

For now we wish raise particular concern about the approach signaled by Questions 21 and 15 and to emphasize that public participate is key to CRA, on performance evaluations and crucially on bank merger and expansion applications. Inner City Press, which often submits FOIA requests to the OCC (which is, frankly, slow), the Federal Reserve, FDIC and even non-USA regulators many of whom are faster than the OCC, emphasizes that comment periods should never close while information that is not specifically exempt from disclosure under FOIA is being withheld. Inner City Press has pending with the OCC, but not yet responded to, FOIA requests related to this proceeding / process, that should be responded to in full, including any necessary appeal, during this proceeding.

If the OCC proceeds to significantly diminish the importance of assessment areas on CRA exams, the progress in increasing lending to low- and moderate-income neighborhoods will be halted. NCRC estimates that low- and moderate-income neighborhoods could lose up to $105 billion in home and small business lending nationally over a five year time period. We join in the comments of NCRC, of which we are members... We urge the OCC to go back to the drawing board and develop reform proposals with the Federal Reserve Board and the FDIC.

And, for the reasons above and yet to be submitted, we contend Comptroller Otting should be recused from this process. Thank you for your attention to this."

While Reuters blandly noted 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 challengedby 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: 

"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"

Regulators Said Sterling's CRA Data Unreliable, Sterling Mis-Sends Response, Fed Expedites ICPs FOIA

By Matthew R. Lee, New Platform

NEW YORK, May 20 – Sterling Bank, which is applying for approvals to acquire Astoria Bank, is known by its regulators to have filed unreliable Community Reinvestment Act data from at least 2014 through 2016, a documentobtained by Inner City Press shows. The story, and outrage, has been picked up by the American Banker newspaper here, by Paul Davis and Allison Prang, crediting Inner City Press - and Sterling Bank had no comment. Instead, Sterling's outside counsel Wachtel Lipton chose to snail-mail its response to the wrong address, and not e-mail it to Fair Finance Watch. Via here, with envelope re-submitted to Fed and OCC. This while the Federal Reserve has granted Inner City Press' request for expedited treatment of its FOIA request for all records, promising the responsive documents by June 1. Fed letter on Scribd, here.

Regulators Said Sterling's CRA Data Unreliable, Sterling Mis-Sends Response, Fed Expedites ICPs FOIA, Here by Matthew Russell Lee on Scribd

Fair Finance Watch has asked both the Fed and OCC to extend their comment periods past this date. Watch this site. Sterling has issued a press release ("covered" without any analysis by Reuters) that "the Federal Reserve inadvertently made public confidential supervisory information.. Because of the legal constraints relating to disclosure of confidential supervisory information, we are working closely with our regulators to craft a more detailed public response." Sterling is working WITH the regulators - the judges in this case - to spin its inaccurate data? After on its last acquisition, challenged by ICP, having to make a CRA compliance plan? Inner City Press has submitted Freedom of Information Act requests (a response here) and Fair Finance Watch has filed additional comments to the Federal Reserve and OCC, demanding public hearings into the unreliable data AND into how the regulators were dealing with (or covering up) the issue, in stealth. We'll have more on this: the US Federal Reserve denied Fair Finance Watch's request to extend the comment period on Sterling's application, in which even the Fed suspects there is incorrect CRA data. 

On May 11, the Federal Reserve Bank of New York along with questions about about branch closures and a CRA plan required after Fair Finance Watch's previous challenge to Sterling asked: "In a letter dated December 23, 2016, from the OCC to Sterling Bank regarding the OCC's data integrity review, the OCC stated that Sterling Bank's 2014-2016 CRA data is not reliable and that Sterling Bank lacks an effective process for collecting, verifying and reporting such data. To the extent that any of the CRA data in the notice is incorrect, submit the corrected data. In addition, describe Sterling Bank's efforts to address its CRA data compliance management deficiencies." 

So on April 26 in Sterling's analysts' call, did CEO Jack Kopnisky or Senior EVP Luis Massiani disclose the “unreliable” CRA data to, among others, Dave Bishop – FIG Partners, Casey Haire – Jefferies, Alex Twerdahl – Sandler O'Neill,, Collyn Gilbert – KBW, Matthew Breese – Piper Jaffray and Erik Zwick – Stephens Inc? Questions about this deal (here) and the Fed's commitment to public scrutiny are raised by its simultaneous denial of FFW's request for a hearing and to extend the comment period. There is no indication that the "corrected" CRA data would ever be made available to the public, or that this issue would not have been swept under the US bank regulators' carpet, like so many others. We'll have more on this.  

Regulators Say Sterling Bank's CRA Data Unreliable, Astoria Merger Document Shows, Here by Matthew Russell Lee on Scribd

Background: after Astoria Bank's protestedproposal to be acquired by New York Community Bank fell apart in late 2016, it found a new, equally controversial suitor: Sterling Bancorp. Now Fair Finance Watch has submitted a first Community Reinvestment Act challenge to the proposed merger, receipt of which the Federal Reserve has now confirmed, here. Inner City Press' summary of FFW's filing: "Dear Chair Yellen, Secretary Misback and others in the FRS: This is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Application by Sterling Bancorp, Montebello, New York (“Sterling”) to merge with Astoria Financial Corporation, Lake Success, New York, and indirectly acquire Astoria Bank (“Astoria”).
This would be a combination of banks with disparate and in places highly irregular Home Mortgage Disclosure Act (“HMDA”) data. The proposal is the desperate result of the failure of Astoria's attempted merger with NYCB. That is no reason to approve this mis-conceived combination. The applicant's Sterling National Bank (“Sterling”) in the New York City MSA in 2015 for African Americans for home purchase loans denied the applications of African Americans 3.58 times more frequently than those of whites - much worse than other lenders. Sterling made only 22 such home purchase loans to African Americans, versus 495 to whites (and only 37 to Latinos) - again, much more disparate than other lenders. This bank should not buy Astoria. Remember: in the Nassau Suffolk MSA in 2013, Sterling made 149 home purchase loans to whites – and only one to an African American. For home improvement loans, Sterling made 30 to whites, none to African Americans. Taken together, this is unacceptable. The comment period should be extended to clarify – or refile – the HMDA data; evidentiary hearings should be held; and on the current record, the application should not be approved.
For the record, the CRA plan required after Fair Finance Watch's previous protest, we contend has not been complied with, and request evidentiary and public hearings on that basis.
Also for the record:  'The NYCB-Astoria Financial Merger is Kaput: Consumer advocates were among the groups that opposed NYCB’s acquisition of Astoria…'"

   In January, disparate lender Investor Bancorp, on which Fair Finance Watch previously got a condition imposed saw its proposal with Bank of Princeton fall apart.

  There's also Capital One - Cabela, on which Inner City Press commented: "In the New York City MSA in 2015, the most recent year for which HMDA data is available, for conventional home purchase loans Capital One denied the applications of whites 23% of the time, while denying African Africans fully 45% of the time, and Latinos even more, 46% of the time. This is unacceptable.

  Meanwhile, Capital One is “closing branches in Laurel, Gaithersburg, Frederick and Merrifield.”

   Capital One came back with snark, as has Simmons National -- but then announced including to NCRC that  it will withdrawn its application. Onward.