Obama Nominates for OPIC Herencia, a Banker Who Took TARP Bailout Then Went Bankrupt

By Matthew Russell Lee

UNITED NATIONS, April 23 -- It was late Tuesday afternoon when the Obama administration announced it was nominating Roberto R. Herencia to be a member of Board of Directors of the Overseas Private Investment Corporation.

  It seemed routine. His biography, as presented in the announcement, states that “between 2009 and 2010, Mr. Herencia was the President and CEO of Midwest Banc Holdings Inc. and Midwest Bank and Trust.”

  But there's a problem, most straight-forwardly found in the case In re Midwest Banc Holdings Inc., 10-37319, U.S. Bankruptcy Court, Northern District of Illinois (Chicago.)

  In that case, Midwest listed $9.7 million in assets but $144.7 million in debt. It had taken $84.8 million in bailout funds from the Troubled Asset Relief Program. The bank and its 23 branches were shut down on May 14, 2010, with Firstmerit Bank of Akron, Ohio then taking over its $2.42 billion in deposits.

  So why is Obama naming a banker would took an $84 million TARP bailout and then went bankrupt to the Overseas Private Investment Corporation?

  Previously Inner City Press has questioned the appointment of Jay Powell from Deutsche Bank and Carlyle to the Federal Reserve Board, click here for that. 

 Since he was confirmed, Powell has been put in charge of ruling of Federal Reserve appeals of Freedom of Information Act denials, of which Inner City Press has filed several.

  More so than his predecessors, Powell nearly automatically upholds the denials of access, sometimes finding reasons other than the ones asserted to justify continued withholding.

  But in the wake of the financial meltdown and the lack of prosecutions, how about naming a banker who not only took the bailout, but then declared bankruptcy, to a government post on the OPIC board? Watch this site.

In 2012, Lending Disparities Continued at Citi, Chase, BofA & Wells as Fed Lax, Inner City Press Studies and Challenges

By Matthew R. Lee

SOUTH BRONX NY, March 30, 2013 -- In the first study of the just-released 2012 mortgage lending data, Inner City Press and Bronx-based Fair Finance Watch have found that the Big Four banking behemoths Citigroup, JPMorgan Chase, Bank of America and Wells Fargo continued with high cost loans and disparities by race and ethnicity in denials and higher-cost lending.

  2012 is the ninth year in which the data distinguishes which loans are higher cost, over a federally-defined rate spread of 1.5 percent over Treasury bill yields.

  The just released data show that Citigroup confined African Americans to higher-cost loans above this rate spread 2.09 times more frequently than whites in 2012, Fair Finance Watch has found.

  Citigroup confined Latinos to higher-cost loans above the rate spread 1.83 times more frequently than whites in 2012, the data show.

 “Even after the bailouts, lending disparities grew worse and not better," said Fair Finance Watch. "Regulatory laxity, at least on fair lending, has continued despite the financial meltdown caused by predatory lending."

  For JPMorgan Chase, the disparity for African Americans in 2012 was 1.7; for Bank of America it was 1.61; for the largest of Wells Fargo's many HMDA data reporters, the disparity for African Americans in 2011 was a whopping 2.32.

  "The Federal Reserve is becoming more and more bank-friendly, including with recent Freedom of Information Act appeal denials by Governor Jay Powell, formerly a hedge funder and Deutsche Bank official Jay Powell. It remains unclear if the Consumer Financial Protection Bureau will get to this problem," Fair Finance Watch continued. "The disparities in the 2012 mortgage data of these banks further militate for aggressively watchdogging and breaking up these banks."

  Instead, the Fed allowed the creation of a fifth mega-bank in Capital One when it acquired ING DIRECT and the subprime assets of HSBC. 

  In 2012, Fair Finance Watch has found, fully 9.93 percent of Capital One's mortgage loans to African American were higher cost loans, versus 7.61 percent of Capital One's loans to whites. To Latinos, the percentage was even higher: 10.31 percent.

  And so Fair Finance Watch and Inner City Press have re-doubled watchdogging. Challenged by the groups in 2012 and still pending, with FOIA issues, are applications by Customers Bancorp and by M&T, to acquire Hudson City Savings Bank.

  Regulators had allowed Hudson City in 2011, for conventional home purchase loans in the New York City Metropolitan Statistical Area, to make 765 such loans to whites and only FIVE to African Americans (and only 44 to Latinos). Meanwhile, Hudson City denied the applications of African Americans 3.21 times more frequently then those of whites.

  In March 2013 Inner City Press and Fair Finance Watch began a challenge to Investors Bancorp's application to acquire Roma. In the NYC MSA in 2011 for conventional home purchase loans, Investors Bank made 220 such loans to whites, and only TWO such loans to African Americans. Its denial rate for Latinos was FIVE TIMES higher than for whites.

  The Home Mortgage Disclosure Act required that the 2012 data be provided by March 31, following March 1 joint requests by Fair Finance Watch and Inner City Press. Several banks did not provide their data by the deadline, despite confirming receipt of the request. Further studies will follow: 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.

Fed Seat Slated for Ex-Carlyle Hedge Funder Powell, Naked Fox in Henhouse?

By Matthew R. Lee

SOUTH BRONX, December 28, updated -- For an open seat on the Federal Reserve Board, a hedge fund insider from the Carlyle Group, Jay Powell, is reportedly being nominated by President Barack Obama.

Beyond the obvious overtones of a fox guarding the chicken house, what in fact was learned from the global financial meltdown?

The Federal Reserve Board governors, beyond setting interest rates, regulate banks and bank holding companies.

Putting on the Board a person like Powell, who has worked for Bankers Trust / Deutsche Bank (one of the most notorious foreclosers on subprime mortgage loans in the US) and the Carlyle Group (known for brutal investments in Myanmar / Burma (reportedly drilling in Shwe-3 through FDR-Holdings) and the Congo, in tantalum via H.C. Starck in 2007, to say nothing about subprime) is more than a little telling. [See below]

While there is a loud fight about the Consumer Financial Protection Bureau, quietly a fox is proposed to enter the hen house of bank regulation.

Given the activities of Deutsche Bank and the Carlyle Group, which only today was reported to be planning a new vulture fund targeting banks weakened by the financial turmoil of which the Fed is front-man conductor, what conflict of interest safeguards would be in place?

What will Occupy Wall Street do? Who can still say that the Emperor has no clothes? Watch this site.

Update of Dec. 29, 1 am -- the Director of Global Communications of The Carlyle Group has written to say Carlyle "has never invested capital in Burma / Myanmar or the Congo." To unpack the links above, from Amnesty International's Business & Human Rights site:

Drilling for the Burmese Junta

Norwatch 07 Jul 2006

The rig “Frontier Duchess” is believed to have carried out the work in the Shwe field in block 1-A and Shwe-3. But Frontier Drilling’s management will not supply details about either the Daewoo assignment or the exact time the operations took place. “The only thing I can say about the case is that the assignment is completed,” Roar Bye, Finance Director in Frontier Drilling, told Norwatch...“We had a drilling assignment for the Korean company Daewoo and have not entered into an agreement with the military regime in Burma..."...Frontier Drilling...is today a wholly owned subsidiary of FDR-Holdings...FDR-Holdings is consequently controlled by private American funds. These funds include Carlyle/Riverstone – that is, The Carlyle Group of Washington, D.C. (Carlyle), and Riverstone Holdings LLC of New York, N.Y. – and the New York-based finance and investment bank Credit Suisse First Boston (CSFB)..

And

"Tantalum is extracted from an ore called coltan, which is primarily found in Central Africa, particularly in the Democratic Republic of the Congo (DRC). The company H.C. Starck which was sold to Advent International and the Carlyle Group in February 2007 by Bayer was involved in this trade significantly."

Watch this site.