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By Matthew Russell Lee, Patreon Story
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FEDERAL COURT / S Bronx, August 30 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators remains an open question. The same is the case about money laundering

   As the fourth CRA challenge of 2022, Fair Finance Watch with Inner City Press on the FOIA filed comments with the Federal Reserve against CommunityBank of Texas, fresh off a money laundering / Bank Secrecy Act settlement, with a disparate record, see below.

In June the banks bragged without irony about a new name, Stellar Bank (why not "Redlining Bank" or "Laundering Bank"?) - and claimed they'd close by the end of June.

"The parent companies of CommunityBank of Texas and Allegiance Bank have announced that the resulting company of their merger will be named Stellar Bank.  The rebrand will take effect once the merger completes, expected by the end of June."

Well, Fair Finance Watch's protest is still lending at the end of August 2022. CBTX is still blowing hot air instead of improving its record: "CBTX CEO Robert Franklin said the banks’ executives “don’t know of any reason why this deal wouldn’t get approved.”  “Our understanding is that we are in line. We just don’t know where we are in line, and there’s some 20 to 25 deals pending right now before the Fed." Really?

"From Fair Finance Watch / Inner City Press' protest: "This is a timely first comment on, the Applications of CBTX, Inc., Beaumont, Texas; to merge with Allegiance Bancshares, Inc., and thereby indirectly acquire Allegiance Bank, both of Houston, Texas. As an initial matter, this is a request that the FRS immediately send by email to Inner City Press all non-exempt portions of the applications / notices for which the Applicants have requested confidential treatment. Fair Finance Watch has been tracking both banks, and has found their lending patterns troubling.   In Texas in 2020, CBTX's CommunityBank made 65 mortgage loans to whites with 54 denials. Meanwhile to African Americans it made only THREE loans, while denying fully ten applications. A referring should be made to the DOJ for fair lending violations.     In Texas in 2020, Alliance Bank made 257 mortgage loans to whites with 38 denials. Meanwhile to African Americans it made only SIX loans, while denying fully seven applications. Again, a referring should be made to the DOJ for fair lending violations.   Public evidentiary hearings are needed - especially because, and specifically on, CommunityBank's violations of the Bank Secrecy Act: "WASHINGTON—The Office of the Comptroller of the Currency (OCC) today announced a $1 million civil money penalty against CommunityBank of Texas, N.A., Beaumont, Texas, for violations of the OCC’s Bank Secrecy Act regulations.  The OCC found that CommunityBank of Texas failed to adopt and implement a Bank Secrecy Act/Anti-Money Laundering system of internal controls to assure ongoing compliance with the Bank Secrecy Act and its implementing regulations. Such deficiencies resulted in CommunityBank’s failure to timely file complete suspicious activity reports for approximately $100 million of suspicious activity.  The OCC’s civil money penalty is separate from, but coordinated with, the settlement between CommunityBank and the Financial Crimes Enforcement Network (FinCEN), which is also being announced today."     FFW and Inner City Press have been deeply concerned about the rush by the Federal Reserve's to rubber-stamp mergers by redliners, money launderers and predatory lenders. This has been killing the Community Reinvestment Act and we timely request public hearings. The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved."

 In response? CBTX put in a one-line letter of support from a hospital, and another bragging about other support from "corporate sponsors such as Valero, ExxonMobil, Entergy and many
others." That was from Nutrition & Services for Seniors. Who else? And how does this rebut money laundering and redlining?

  Well, the Federal Reserve asked some questions - while at the same time declining to extend the comment period. They asked "0. Page 18 of the public section of the application states that the best CRA practices of both  institutions will be leveraged to create an enhanced CRA program at the combined bank  and that additional information would be provided when it becomes available. Provide  updated information about the CRA program. If that information is not yet available,  provide a timeline for when that information will be available.  11. Clarify whether the consumer compliance (including fair lending) programs at the  combined bank would be CommunityBank’s current programs, Allegiance Bank’s  INTERNAL FR/OFFICIAL USE // EXTERNAL current programs, some combination of the current programs of CommunityBank and  Allegiance Bank, or programs developed from other sources.  12. Indicate the key individuals who would be responsible for the CRA and consumer  compliance (including fair lending) programs at the combined bank, as well as their  qualifications and experience.  13. Describe any modifications to the merged bank’s consumer compliance risk management  program that are planned as a result of this proposal.  [Confidential Question]  14."  Yeah, confidential

  On February 17 Fair Finance Watch filed timely comments opposing the application with the self-described new FDIC. We'll see. 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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