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By Matthew Russell Lee, Patreon Story
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FEDERAL COURT / S Bronx, Sept 9 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question.

On the one hand we have this from September 9: the Office of the Comptroller of the Currency brags that it is imposing a $250 million fine against Wells Fargo Bank NA, citing flaws in the bank's home loan loss mitigation program and unsatisfactory remedial progress under a 2018 consent order tied to past allegedly improper practices.

 On the other hand, on an actual CRA protest to a national bank with a disparate lending record, what?

We're referring to the proposed acquisition by South State of Atlantic Capital Bank. South State is so disparate that in South Carolina in 2020 for mortgage loans to African Americans it had more denials (147) than loans made (133) - while making six loans to whites for every denial to a white applicant.

On September 4, Fair Finance Watch commented to the Office of the Comptroller Currency, which some say has changed for the better. We'll see - on September 7, South State wrote to Fair Finance Watch, cc-ing the OCC and Fed: "Dear Mr. Lee... In the matter regarding the concerns of the Bank’s disparate marketing, the Bank is committed to providing equal access to credit throughout our footprint. The Bank takes a multi-layered approach to ensure that marketing of credit products reach all communities within the Bank’s Assessment Area and each application is underwritten without consideration of a prohibited basis. The Bank has undergone reviews by independent audit firms with reports dated June 30, 2020 and June 30, 2019 where marketing efforts have been reviewed. The reviews did not yield any fair lending concerns."

Then something is very wrong with those audits.

Inner City Press replied to South State Bank's Senior Vice President  and Deputy General Counsel V. Nicole Comer  and two others: "           Thanks for your response, which concludes "If you have further questions, please do not hesitate to contact me."     Given the disparities Fair Finance Watch has identified in South State's HMDA data, and your response, a few questions:  You wrote, "The Bank has undergone reviews by independent audit firms with reports dated June 30, 2020 and June 30, 2019 where marketing efforts have been reviewed. The reviews did not yield any fair lending concerns."  Question: Does this mean that the firmS used in 2019 and 2020 were different? Given the disparities, and the findings or yield, will you identify them?  Relatedly, you wrote: "the Bank annually engages an independent audit firm and conducts quarterly internal comparative file reviews.. Results of each of these comprehensive  evaluations and assessments indicated no evidence of disparate treatment or impact." Is this by the same firm or a different one? What is South State's explanation, then, of the disparities identified?  You wrote: "in 2021 the Bank created a new position, Director of Corporate Stewardship who is responsible for the social component of the Bank’s environmental, social, governance initiatives, which includes diversity, equity, and inclusion efforts." Has the position been filled? When?  Can you describe the work accomplished in each of the listed fields or efforts?" Two days later, nothing. And from the OCC?

As to the Fed, which denies FOIA requests after five months, here, on August 25, this strange response: "Dear Mr. Lee,     This is to acknowledge receipt of your email to the Office of the Secretary for the Board of Governors of the Federal Reserve System (Board) dated August 17, 2021, regarding the proposal of South State Corporation to merge with Atlantic Capital Bancshares, Inc., and thereby indirectly acquire Atlantic Capital Bank, NA.  To date, South State Corporation has not filed an application with the Federal Reserve System.  Currently, the public comment period for the proposal will end on September 20, 2021. 

   If an application is filed within the next three months from the date your comment was sent, your correspondence will be made part of the record, and the Board will evaluate your comment.  We will also send a copy of the public portions of the application as soon as possible after the application is received.     Sincerely,     Jennifer Snow  Senior Examiner  Supervision, Regulation, and Credit  Federal Reserve Bank of Atlanta     Integrity. Excellence. Respect."

How can there be a comment period with expiration date, if there is no application? Inner City Press asked, and on August 26 is told:

"Our procedures provide that advance notice in the Federal Register may be requested in advance of a filing. The comment period end date applies to the Federal Register notice, which was filed in advance of the application being filed."

   What - the comment period running to its conclusion, before any application to comment on is available? This seems far too bank-friendly. How does it relate to the administration's Antitrust Memo? Watch this site.

Dear Chair Powell, Secretary Misback and others in the FRS:   This is  a timely first comment opposing the Applications of South State Corporation to merge with Atlantic Capital Bancshares, Inc., and thereby indirectly acquire Atlantic Capital Bank, NA .

 Fair Finance Watch has been tracking South State Bank NA:  The applicant's South State Bank NA in 2020 in Florida based on its disparate marketing made 5721 mortgage loans to whites, with 1019 denials to whites -- while making only 143 loans to African Americans, with 48 denials. This is far out of keeping with the demographics, and other lenders, in Florida - this is outrageous. 

This is a pattern. South State Bank NA in 2020 in South Carolina based on its disparate marketing made 3048 mortgage loans to whites, with 537 denials to whites -- while making only 133 loans to African Americans, with fully 147 denials. This is far out of keeping with the demographics, and other lenders, in South Carolina. The denials to African Americans are... outrageous.   

Perhaps most relevant, South State is disparate in the state it is trying to make this acquisition to impose and expand its practices. South State Bank NA in 2020 in Georgia based on its disparate marketing made 4068 mortgage loans to whites, with 451 denials to whites -- while making only 494 loans to African Americans, with 120 denials. This is far out of keeping with the demographics, and other lenders, in Georgia - this is outrageous.

 The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved.

 Inner City Press (and Fair Finance Watch, on the HMDA) will have more to say about this. Watch this site.

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