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By Matthew Russell Lee, Patreon Story
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FEDERAL COURT / S Bronx, August 24 – Whether or not the U.S. Community Reinvestment Act will actually be enforced under the Administration and its regulators remains an open question. Consider: Inner City Press immediately reported that BMO Harris' application to buy Bank of the West and its more than 500 branches from BNP would be a litmus test.

 Fair Finance Watch noted, from Day 1, that in 2020 BMO Harris denied many more mortgage applications from African Americans than it approved: 509 denied versus only 223 loans made to African Americans, nationwide. BMO's numbers for whites were the reverse: 9270 loans made, versus less then six thousand denials. As noted, there are also climate and secrecy issues. Fair Finance Watch and other raised branch closings.

Now on August 23-4 the Fed has asked questions:

"BHB’s and BOTW’s business models do not align and thus the approval of this transaction would result in branch closures. Discuss BHB’s plans to integrate BOTW’s existing branches pursuant to BHB’s overall business strategy. Specifically discuss the function of retail branches in the anticipated strategy and business model of the combined organization. 2. Discuss whether BHB plans to close any branches or relocate or consolidate any BOTW or BHB branches in connection with the proposed transaction. 3. One commenter raised concerns that BHB would discontinue BOTW’s CRA programs in California following the merger. Discuss BHB’s plans with respect to BOTW’s CRA community development activities in California following consummation of the proposed transaction, including loans, investments, and services.

4. Multiple commenters raised concerns that BOTW did not engage in enough philanthropic activities when compared to similar institutions. Please respond to these allegations. 5. Provide a list of organizations and community groups, if any, with which BHB engaged since 2020 to help reach African American and Hispanic borrowers in Minneapolis, Minnesota and the State of Wisconsin. If applicable, provide detailed information regarding such partnerships. In addition, provide information about BHB’s current and planned efforts to reach African American and Hispanic borrowers in Minneapolis, Minnesota and the State of Wisconsin, including specialized products and marketing campaigns. 

6. Please provide a list of organizations and community groups, if any, with which BOTW engaged since 2020 to help reach African American and Hispanic borrowers in Denver, Colorado, San Francisco California, and the State of California. If applicable, provide detailed information regarding such partnerships. In addition, provide information about BOTW’s current and planned efforts to reach African American and Hispanic borrowers in Denver, Colorado, San Francisco, California, and the State of California, including specialized products and marketing campaigns.

7. Provide further information on BHB’s plans on changing its overdraft practices, including: a. Copies of policies and procedures for BHB’s new overdraft program; b. Information on the procedure for when an account is overdrawn for an extended period; c. The definition of “extended period”; d. Whether customers can incur consecutive day overdraft fees if the account is overdrawn within the extended period; and e. Whether BHB’s Compliance staff has reviewed the bank’s revised overdraft policy, procedures, and communications to existing and potential customers."  We'll have more on this.

The banks in an August 3 letter belatedly admitted: "One commenter requested that certain confidential exhibits to the April 12, 2022 responses to the Federal Reserve as well as certain confidential exhibits to the initial Federal Reserve application be made public. The parties have reviewed this information and have concluded that some of this information can be public." So why did they mislabel it, and the Fed allow it? The comment period must be reopened. Especially in light of this:

The banks now claim: "Commenters criticized BNP Paribas S.A.’s15 and BMO’s efforts related to climate resiliency and lending to the fossil fuel industry...Similarly, BNP Paribas and BOTW have some of the financial services industry’s most restrictive financing policies concerning the most damaging forms of fossil fuel extraction and have minimal exposure to the fossil fuel exploration and extraction sectors."

But consider: "Following the UK government's decision  to give "final regulatory approval" to Shell's Jackdaw gas field in the North Sea, a coalition of climate organizations  sent a letter to the oil major's biggest bankers calling for a halt to the project. The letter was sent to 25 financiers of Shell, including the top five financiers in the period 2016 - 2021: BNP Paribas... Almost all of the bank recipients of the letter have commitments to reach “Net Zero” in their financed emissions by 2050, including the top five – all members of the Net Zero Banking Alliance (NZBA). The letter highlights the incompatibility between these banks’ financial relationship with Shell and their own climate commitments, potentially exposing them to significant reputational, legal, financial and other risks."

We'll have more on this- watch this site.

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

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