| In DC Talk
of Saule Omarova as OCC As CRA Protest of
South State's Atlantic Capital Pends
By Matthew
Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL COURT / S
Bronx, Sept 23 – Whether or
not the U.S. Community
Reinvestment Act will be again
enforced until the new
Administration and its
regulators is an open
question.
All the more so
with news that the Biden
Administration is poised to
nominate Saule Omarova to head
the Office of the Comptroller
of the Currency. While
described as "anti big bank" -
good - what are her views on
CRA, and how would she
approach, and deny some,
mergers? What would she do on
U.S. Bank - MUFG's Union Bank?
What did she do at Davis Polk?
These are questions.
Now the proposed
acquisition by South State of
Atlantic Capital Bank in
Georgia will be a litmus test.
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 August 17,
Fair Finance Watch and Inner
City Press on the FOIA) filed
a comment with the Federal
Reserve Board, below.
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 - now on
September 7, South State has
written 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.
The Fed briefly
extended the comment period -
but then on September 23 asked
this of South State: "This
correspondence relates to the
application filed by South
State Corporation, Winter
Haven, Florida (“South
State”), parent of South State
Bank, National Association
(“South State Bank”), to merge
with Atlantic Capital
Bancshares, Inc. (“Atlantic
Capital”), and thereby acquire
its subsidiary, Atlantic
Capital Bank, National
Association (“Atlantic Capital
Bank”), both of Atlanta,
Georgia, pursuant to sections
3(a)(3) and 3(a)(5) of the
Bank Holding Company Act of
1956, as amended (“BHC Act
Application”). Please respond
in full to the following
additional information items,
including those listed in the
confidential annex, and
provide supporting
documentation as
appropriate. ASSET
QUALITY 1. Provide the
following classified asset
information, as of June 30,
2021, for South State Bank,
Atlantic Capital Bank, and the
pro forma institution. a. The
amount of internally
classified assets, comprised
of the separate categories of
substandard, doubtful, and
loss, with relevant components
of other real estate owned
separately identified in each
category. b. Detail for the
calculation of the classified
assets ratio, including the
level of classified assets
compared to the total amount
of tier 1 capital and
allowance for loan loss
reserves. INTEGRATION
RISK 2. Given South State’s
significant and recent merger
with CenterState Bank
Corporation in June 2020,
describe the status of
integration of the two
companies, including whether
South State’s key resources
have the bandwidth to
successfully execute and
integrate the proposed merger
with Atlantic Capital.
OTHER INFORMATION 3. Clarify
whether Atlantic Capital has
elected to be treated as a
financial holding company
under the Bank Holding Company
Act of 1956, as amended.
Section 3.1 of the Agreement
and Plan of Merger between
South State Corporation and
Atlantic Capital Bancshares,
Inc. indicates that Atlantic
Capital has not made this
election, while the response
to question 1 of the Form FR
Y-3 indicates that Atlantic
Capital is “a designated
financial holding company.” 4.
Provide the following: a. Pro
forma organizational charts of
South State, including South
State Bank, following
consummation. b. Update on the
status of all other agency
filings. c. Copy of the Form
S-4 filed with the Securities
and Exchange Commission in
connection with the proposed
transaction. Request for
Additional Information South
State Corporation September
23, 2021 Page 2 of
2 Please address your
response to Mr. Erien O. Terry
and submit within eight
business days." But that's
after the close of the
("extended") comment period...
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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