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By Matthew Russell Lee, Patreon Story
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FEDERAL COURT / S Bronx, Feb 2 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the now year-old Administration and its regulators remains an open question.

   As the first CRA challenge of 2022, Fair Finance Watch with Inner City Press on the FOIA filed comments with the Federal Reserve against First Internet Bank, see below. First Internet Bank replied to the Federal Reserve that the public HMDA data was not true and the comment should be withdrawn. The Fed said nothing.

  But other banks explained their ineptitude and disparities by blaming policy review at the Fed. So it was with Community Bank Systems of upstate New York, a long time redliner, spinning the delay of its gobbling up of Elmira Saving Bank to compliant scribes:

"Erik Zwick: What was the driver of the decision to move the closing of Elmira to 2Q? 

Mark Tryniski: I don't know if it's so much a decision on our part, it's just on expectations around where we see the trend of the regulatory approval process going. So we decided to push it off two months further out just based on the progress and the dialogue with the regulators. I mean, there's nothing of note or concern.  I think it's just right now with the administration and the pending appointments of some of the agency leadership and the - I'll call it, the interest of all of the regulatory agencies on every single transaction, even those who have a, let's call it, tangential involvement, it's a lot more [indiscernible] slow everyone out there, that's just the trend right now. So we just decided to push it out a couple of months to be sure. 

Erik Zwick:  Got it. That makes sense."

  No, it only makes sense to insiders. Now the same echoed by Valley Republic Bank, issuing a letter that its acquisition by TriCo Bancshares was delayed only by bureaucracy.

 But the Fed hauled off and rubber stamped Old National, despite a fair lending lawsuit and detailed comments from Fair Finance Watch. The Fed's already quiet bark remains worse than its rarely if even implemented bite. Will that change?

: "This is a request for a full copy of, and a timely first comment on, the Applications of First Internet Bancorp to acquire First Century Bancorp and First Century Bank, N.A., Commerce, Georgia. 

Fair Finance Watch has been tracking First Internet Bank, and has found its lending patterns troubling.  First Internet Bank in 2020 based on its disparate marketing made 2114 mortgage loans to whites, with only 178 denials to whites -- while making only 66 loans to African Americans, and denying 21 applications from African Americans. FIB essential denies African Americans three times more frequently than whites - worse that the rest of the industry - and makes a far smaller percentage of its loans to African Americans than other banks, particularly those based in Indiana (or Georgia). 

This application should be denied, and a referral made to the Justice Department, as the Fed did far too late on Cadence Bank, whose lesser disparities Inner City Press similarly raised to the Fed.    Public evidentiary hearings are needed - including on First Internet Bank's "tax product lending."

And on this, timely entered into the record:  "07/31/2019  Gave them all my personal info for a mortgage loan and received no call back tried to contact them to no avail. Scared it was a scam to get my info. They were recommended by credit karma. They have my fathers info also. They guaranteed they would get this done. Complaint Type: Problems with Product/Service Status: Answered 03/13/2019  I have attempted to contact someone at this office countless times via phone call, email and chat, I have been unsuccessful in finding out the reason this bank has decided to lock my account and HOLD MY FUNDs WITHOUT INFORMING ME... 

FFW and Inner City Press have been deeply concerned about the rush by the Federal Reserve's to rubber-stamp mergers by redliners 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."

First came the news that the Biden Administration had nominated Saule Omarova to head the Office of the Comptroller of the Currency. While described as "anti big bank" - good - Inner City Press and others asked, What are her views on CRA, and how would she approach, and deny some, mergers? This got lost in the comrade talk. Now her nomination is over, with Omarova pulling the plug after opposition by Sens. Jon Tester (D-Mont.) Mark Warner (D-Va.) Kyrsten Sinema (D-Ariz.), John Hickenlooper (D-Colo.) and Mark Kelly (D-Ariz.). So who's next?

Meanwhile the proposed acquisition by South State of Atlantic Capital Bank in Georgia remains 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.

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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