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By Matthew Russell Lee

South Bronx, New York, August 26 – The lack of seriousness in US bank regulation, the mechanical repeating of whatever a challanged bank says, is exemplified by the application by BancorpSouth, which Inner City Press / Fair Finance Watch challenged on disparities and which settled racial redlining charges, to drop its Federal Reserve charter and evade regulation. Now ICP/FFW has timely protested that application to the FDIC: "Dear Regional Director Elmquist, Ass't Regional Director Finnegan and others at the FDIC: "This is a first timely comment opposing, requesting hearings and an extension of the comment period on BancorpSouth's cynical application to evade regulation after its redlining and settlement. Inner City Press / Fair Finance Watch protested the applications of BancorpSouth to merge with Ouachita Bancshares Corporation and thereby indirectly acquire Ouachita Independent Bank, and with Central Community Corporation, and thereby indirectly acquire First State Bank Central Texas, Austin, Texas. - based on racial discrimination in lending... Now BancorpSouth makes this application, and its CEO Dan Rollins states that it wants to “alleviate... regulatory oversight,” and become the “only state-chartered bank not a part of the Federal Reserve system.” We oppose this cynical evasion, particularly by one of the few banks having settled redlining charges. Let's compare: reviewing the 2015 HMDA data released by the FFIEC, ICP examined BancorpSouth's conventional home purchase lending in the Jackson, Mississippi and Baton Rouge, Louisiana and finds them troubling. In 2015 in the Jackson MS MSA for conventional home purchase loans, BancorpSouth made 346 loans to whites, only 53 to African Americans. BancorpSouth's denial rate for whites was 7% while for African Americans it was 19% -- 2.71 times higher. This was troubling. In 2015 in the Baton Rouge LA MSA for conventional home purchase loans, BancorpSouth made 47 such loans to whites and NONE to African Americans, even less than the three it made in 2012. BancorpSouth has grown more disparate. ICP is requesting evidentiary hearings and that this proposed acquisition, on the current record, not be approved. There is no public benefit." Inner City Press / Fair Finance Watch challenged BancorpSouth in 2014, which led to redlining charges by the Department of Justice and Consumer Financial Protection Bureau. After BancorpSouth settled the redlining charges, Inner City Press / Fair Finance Watch immediately wrote to the Federal Reserve urging that its pending merger applications be denied or withdrawn. Now BancorpSouth moves to evade the Fed and regulatory oversight. We will stay on this, as long as it takes.
As the fintech industry in the US tries to move into banking, either through a new charter or, like SoFi, an end-run using the Utah industrial bank loophole, Fair Finance Watch and others are raising issues. Meanwhile, the corporate Financial Times which asked Inner City Press which bank trade groups might also be opposing has just run a story allowing these industry groups to be the voice of the Community Reinvestment Act: "Another lobbyist, Richard Hunt of the Consumer Bankers Association, said the CBA would take its time to review SoFi’s application, but argued that the company had so far been 'loosey-goosey' with respect to laws governing banks with regular charters. He cited the Community Reinvestment Act, a 1977 law requiring federally-insured banks to support low-income groups within their communities, which he said was incompatible with SoFi’s habit of cherry-picking graduates from elite universities. 'If you went to Princeton, Stanford or Harvard you can get a loan, but if you’re a ragin’ Cajun from Indiana I’m pretty sure you’d have been denied,' said Mr Hunt, who is president and chief executive of the CBA." The FT author, Ben McLannahan, had asked Inner City Press, "anyone else you can think of who might lodge a strongly-worded complaint?" Inner City Press made suggestions. This is corporate media. Fair Finance has commented to the FDIC, and Inner City Press made requests citing FOIA: "Re: Timely Opposition to the Application by FinTech Company SoFi to Open a Bank, Including Offering a Secured Credit Card at Upward of 20% interest and trying to limited CRA to Utah
To the Addressees at the FDIC:
  On behalf of Inner City Press / Fair Finance Watch, this is a timely comment on the application by fintech company SoFi to open an FDIC-insured industrial bank in Utah, to limited its CRA assessment area to (part of) Utah while project business nationwide, and to claim that a secure credit card with interest rate north of 20% is a CRA program. We request public hearings and denial of the application.
   As you know, the drive by fintech companies to get into banking is a matter of controversy, with the OCC have proposed a new type of charter. This end run would set a bad precedent, of gerrymandered CRA and even predatory lending as CRA.
  The application - with portions apparently withheld that should be released under FOIA and now whatever ex-parte rules the FDIC has - states twice that “the bank will offer a secured credit card utilizing its credit card and deposit infrastructure to the LMI community and the    members with a 'shallow credit' file [with] the following features... a much higher interest rate north of 20% percent.”  This is outrageous.
  For the record, also in support of the public hearing request, from the WSJ: “the entire sector is in trouble. Growth has slowed dramatically because of deeper worries about consumer-loan defaults and shifting preferences among some investors for other kinds of debt. Some of the largest online lenders have cut jobs, with Avant Inc. and Prosper Marketplace Inc. shrinking their number of employees by more than 25%. Confidence also was bruised badly when LendingClub pushed out its chief executive in May because of a scandal involving fabricated loan data. In the second quarter, venture-capital investments into lending startups fell by nearly half from a year earlier.. SoFi itself stumbled when consumers flooded its website after the lender ran an ad during the Super Bowl in February. Applicants who didn’t hear from SoFi for days blasted it in online ratings.”
Ready for prime time and FDIC insurance?
  Again, we request public hearings, and on the current record the denial of SoFi's application." In other news, 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 document obtained 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. The OCC has now put up a roadblock to releasing the records Inner City Press has requested under the Freedom of Information Act, writing: "The purpose of this letter is to seek additional information pertaining to your recent request for information from the Office of the Comptroller of the Currency. Your request dated May 13, 2017 was received in my office on May 15, 2017. You requested any and all records related to Sterling Bank's application(s) to acquire Astoria and Sterling Bank's CRA data. Upon further review, we determined that we need clarification on the date range for search of Sterling Bank’s CRA data. If I have not received this information by COB June 19th I will assume that you no longer seek this information and consider your request closed." How did it take the OCC a full MONTH to come up with this? 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. But then the Fed, in a June 1 letter, unilaterally extended its time to June 22. First Fed letter on Scribd, here.

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