Fed
Asks Goldman
Sachs About Capital,
Withholds from
ICP Qs 6 and 7
By
Matthew R. Lee
NEW
YORK, January
14 -- The lack
of seriousness
in US bank
regulation
grows from the
relatively
smaller to the
largest banks
like Goldman
Sachs - and
those in the
middle,
seeking to
become a
Systemically
Important
Financial
Institution
like New York
Community
Bancorp is,
applying to
buy Astoria
Bank.
On
Goldman Sachs,
on January 14
the Federal
Reserve asked
one more
question,
referring to a
Confidential
Exhibit, below
-- while
belatedly
releasing in
response to
Inner City
Press'
December 2
Freedom of
Information
Act request a
heavily
reacted
submission,
still
withholding
even its own
Questions 6
and 7. This is
today's Fed;
this is
today's Fed
question to
Goldman:
"Below
is an
additional
information
request in
connection
with the
application
filed by
Goldman Sachs
Bank USA, New
York, New
York, for
prior approval
of the Board
of Governors
of the Federal
Reserve
System, to
acquire by
purchase and
assumption
certain
deposit
liabilities
and certain
non-financial
assets of GE
Capital Bank,
Holladay,
Utah, pursuant
to Section
18(c) of the
Federal
Deposit
Insurance Act.
"1.
Provide
balance sheet
and income
statements for
GS Bank as of
December 31,
2015. If
unaudited
statements are
only
available,
then that is
sufficient.
Otherwise
provide
statements as
of September
30,
2015.
These
statements
should be
provided on an
actual and
proforma
basis, with
adjustments
and relevant
explanatory
footnotes.
In addition,
provide actual
and proforma
regulatory
capital ratios
as of December
31, 2015, if
available,
otherwise, as
of September
30,
2015.
This request
updates
Confidential
Exhibit 2 of
the
Application
dated August
19, 2015."
More and more
confidential,
the Fed's --
and Goldman
Sachs' --
processes more
and more untransparent.
On
January 8 the
Fed asked
Goldman these
questions,
sent to Inner
City Press on
January 11:
"January
8, 2016
This is in
reference to
the proposal
by Goldman
Sachs Bank USA
(“GS Bank”),
New York,
NewYork, to
assume certain
deposits and
acquire
certain assets
of GE Capital
Bank (“GE
Bank”),
Holladay,
Utah, pursuant
to section
18(c) of the
Federal
Deposit
Insurance Act.
Based on
staff’s review
of the current
record, the
following
additional
information is
requested.
Please provide
responses to
all of the
following
questions,
including
those in the
confidential
annex. Please
provide
relevant
supporting
documentation
as
appropriate.
Further
information
may be
required as
staff
continues its
review of the
proposal.
1) Describe
any changes in
types or level
of CRA-related
activities
aimed at
meeting the
credit needs
of LMI
borrowers and
communities in
GS Bank’s CRA
assessment
areas post-
transaction.
2) With
respect to the
retail online
certificates
of deposit and
the retail
online savings
accounts to be
assumed from
GE Bank,
a) provide the
number of
deposit
customers and
amount of
deposits by
state based on
the address of
the deposit
customer;
b) describe
any benefits
the deposit
customers will
derive from
the transfer
of their
deposits from
GE Bank to GS
Bank; and
c) describe
any reduction
in services
that the
deposit
customers will
experience as
a result of
the transfer
of their
deposits from
GE Bank to GS
Bank.
Please provide
your response
as soon as
possible, but
no later than
four business
days from
today.
Address your
response to
Ivan Hurwitz,
Federal
Reserve Bank
of New York.
To facilitate
more timely
distribution
of the
information
within the
Federal
Reserve
System, please
send the
original and
four copies of
the response
to Vivian Liu
of the Federal
Reserve Bank
of New York.
Provide a copy
of the public
portion of
your response
to the
commenters.
Any
information
for which
confidential
treatment is
desired should
be so labeled
and separately
bound in
accordance
with section
261.15 of the
Board’s Rules
Regarding
Availability
of
Information."
And
then, the Fed
might say,
delay forty
days in
releasing it.
Goldman
Sachs is
trying to
speed through
Federal
Reserve
approval to
buy $16
billion in
insured
deposits from
GE Capital,
and the Fed,
documents
released to
Inner City
Press under
the Freedom of
Information
Act (FOIA)
show, is
inappropriately
bent on
helping,
including by
closing its
comment
period. But
now the Fed
has given
itself an
extension to
respond to
Inner City
Press'
December 3
FOIA request
for Goldman
Sachs'
withheld
December 2
submission,
writing this
to Inner City
Press:
"Re:
Freedom of
Information
Act Request
No.
F-2016-0056
Dear Mr. Lee,
On December 3,
2015, the
Board of
Governors
(“Board”)
received your
electronic
message dated
December 2,
2015, pursuant
to the Freedom
of Information
Act (“FOIA”),
5 U.S.C. §
552, for the
entirety of
the December 2
submission in
connection
with the
“Application
by Goldman
Sachs Bank USA
for the
Acquisition by
Purchase and
Assumption of
Certain
Deposit
Liabilities
and Certain
Very Limited
Non-Financial
Assets of GE
Capital Bank.”
Pursuant to
section
(a)(6)(B)(i)
of the FOIA,
we are
extending the
period for our
response until
January 19,
2016, in order
to consult
with two or
more
components of
the Board
having a
substantial
interest in
the
determination
of the
request.
If a
determination
can be made
before January
19, 2016, we
will respond
to you
promptly.
It is our
policy to
process FOIA
requests as
quickly as
possible while
ensuring that
we disclose
the requested
information to
the fullest
extent of the
law."
On a FOIA
appeal Inner
City Press
filed in
October, on
December 3 Fed
Governor Jay
Powell,
previously of
Deutsche Bank
and the
Carlyle Group,
issued a
ruling that
declined to
deal with the
irregularities
in the
processing of
the
application
but
acknowledged
that basic
information
like what
Goldman is
seeking to
acquire was
wrongfully
withheld. Appeal
decision
online here.
But the Fed
has yet to
re-open the
comment
period. Inner
City Press /
FFW has
submitted a
request for
just this.
On
December 2,
Goldman Sachs
sent Inner
City Press a
heavily
redacted copy
of its
submission to
the Federal
Reserve. Inner
City Press has
put
it online,
here, and
immediately
submitted this
under FOIA:
"This
is a FOIA
request for
the entirety
of the
December 2
submission in
connection
with the
'Application
by Goldman
Sachs Bank USA
for the
Acquisition by
Purchase and
Assumption of
Certain
Deposit
Liabilities
and Certain
Very Limited
Non-Financial
Assets of GE
Capital Bank,'
of which a
heavily
redacted copy
was sent to
Inner City
Press, as a
timely
commented, by
Goldman Sachs'
outside
counsel past
10 pm on
December 2. On
the cover
letter,
referring to a
“Confidential
Application,”
much is
redacted; four
exhibits are
withheld in
full. Given
this, ICP
contests and
is hereby
request all of
this
information.
On Response 1,
after the
words
“Strategic
Plan,” there
are heavy
redactions.
Later, Goldman
Sachs tries to
withhold even
what is seeks
to acquire.
Exhibits A, B,
C and D are
withheld in
full. ICP is
requesting all
of them."
Inner City
Press / Fair
Finance Watch
also
immediately
commented on
this to the
Federal
Reserve.
On
November 19,
Goldman Sachs
submitted a
purported
reply to the
Federal
Reserve,
stating among
other things
that "Certain
Comment
Letters
express
concern with
the contact
between GS
Bank and Board
staff prior to
GS Bank
submitting the
Application.
GS Bank
respectfully
submits that
the contact
was both
appropriate
and ordinary
in the context
of the Board’s
own guidance
on pre-filing
communications.11
Additionally,
the
allegations of
contact are
not germane to
the scope of
the statutory
factors set
forth for
Board
consideration
under the Bank
Merger Act."
The 2012 Fed
letter Goldman
Sachs cites
was meant to
benefit
smaller banks
- and did not
envision
Additional
Information
letters before
the public was
even notified
of the
proposal. The
misuse of
small bank
"regulatory
relief" by the
likes of
Goldman Sachs
casts new
light of
legislative
riders being
considered for
the US
spending bill
due December
11.
Going
forward,
KeyCorp is
trying to buy
First Niagara,
and NY
Community Bank
wants to buy
Astoria; there
will be opposition.
As to Goldman
Sachs, Inner
City Press /
Fair Finance
Watch filed a
supplement
comment on
October 30
including
Goldman's new
and troubling
settlement
with the NYS
Department of
Financial
Services
regarding a
former Federal
Reserve
employee
impermissibly
using Fed
information
for them.
Public
hearings and
an extension
of the comment
period are
needed.
As
detailed
below, the
Federal
Reserve's
General
Counsel Scott
Alvarez
solicitiously
agreed to
weekend phone
calls with
Goldman's
outside
council Rodgin
"Rodge" Cohen
at Sullivan
&
Cromwell, and
the Fed
submitted its
"Additional
Information"
request to
Goldman in
July, a full
month before
any
application
was submitted
or the deal
publicly
announced.
Thus there was
no way for the
public to be
involved in
the Fed's
review, which
is required by
the Bank
Merger Act
(and the
Administrative
Procedures
Act). The Fed
began trying
to essentially
pre-approve
some
applications
with a 2012
letter to
banks, here
- but it said
no major
issues could
be addressed
this way, and
the
interchanged
would be
subject to
FOIA.
In this case,
though, where
Inner City
Press
submitted its
FOIA request
as soon as it
became aware
of Goldman's
GE proposal
and
application,
none of the
information
would have
been available
until after
the comment
period was set
to close on
September. It
has been
extended to
October 30,
due to
requests from
ICP and other
NCRC members,
but the Fed is
still
withholding
portions of
its
communication
with Goldman
in the face of
the FOIA
Appeal Inner
City Press
immediately
filed. (ICP
has also
submitted a
timely
additional
comment on
these issues.)
Inner City
Press has
previously litigated
FOIA requests
with the Fed
and won, at
least in part,
for example in
obtaining
subprime
lending
information
the Fed wanted
to withhold,
here.
But this
should not be
necessary in
order for the
public to have
this basic
information,
during the
comment
period. Will
members of
Congress and
other chime
in? Watch this
site.
This process
began by
overbroad
withholding of
basic parts of
Goldman's
application, click
here to view,
which Goldman
in an October
14 submission
to the Fed,
here, says
has been cured
(it has not
been).
Now the
Federal
Reserve has
belatedly
responded to
Inner City
Press / Fair
Finance
Watch's
September 2
FOIA request,
with some of
its internal
documents,
many heavily
redacted. FOIA
letter here;
FOIA
documents
released to
ICP here,
and embedded
below.
While
Inner City
Press is
appealing,
even as
released the
documents show
that Goldman
Sachs through
its law firm
Sullivan &
Cromwell
reached out to
Fed General
Counsel Scott
Alvarez in May
2015 about the
transaction,
and was
largely able
to vet it with
the Fed's
staff by July,
even receiving
an "additional
information"
request before
any
application
was filed.
Since the
public cannot
comment or ask
questions
before a
transaction is
announced,
this
"pre-review"
by the Fed in
essence cuts
public review
and
transparency
out of the
process. The
Fed's rules
against
ex-parte
communications
can't be
triggered
before there
is an
application.
But should Fed
review be
held, and
apparently
completed,
before there
is any public
notice?
The documents
Inner City
Press has
obtained under
FOIA show that
on May 14 and
May 18,
Goldman Sachs
and its
outside
counsel Rodgin
"Rodge" Cohen
of Sullivan
& Cromwell
told the Fed
and its
General
Counsel Scott
Alvarez of
their plans
for GE Capital
Bank.
On
May 28, the
Fed met with
Goldman which
presented a
"deck" of
information
about "Project
Apple," much
of it still
redacted as
provided to
Inner City
Press (which
is appealing
under FOIA).
As precedents,
Goldman Sachs
cited Capital
One - ING and
RBC - City
National (see
below).
This
was followed
by a May 29,
2015 letter
from "Rodge"
to the Fed's
Scott Alvarez,
asking for
confidential
treatment of
everything
including the
letter, and
including from
any
Governmental
inquiry. (Page
28 of FOIA
response to
ICP.) A
similar letter
was submitted
by Cohen on
June 16,
attaching a
letter the Fed
has redacted
in full from
Goldman Sachs'
Esta E.
Stecher.
Scott Alvarez
took the
conversation
onto the
telephone, not
subject to
FOIA, on June
16. His
accompanying
e-mails, as
redacted, only
say "Thanks!
Scott."
On
June 26, the
Fed' Alison
Thro wrote
that "Rodgin
Cohen was in
today briefly
to discuss,
among other
things, GS’s
plans to
acquire the
deposits of
GE’s ILC. He
asked what the
next steps
might be."
What were
those "other
things"?
On
July 13, the
Fed sent Cohen
a "request for
additional
information
concerning the
proposal by GS
Bank to
purchase
certain assets
and assume the
deposit
liabilities of
GE Capital
Bank."
A request for
additional
information is
usually what
the Fed sends
a bank or bank
holding
company after
it has
submitted an
application; a
commenter
would get a
copy. Here,
the Fed was
pre-reviewing
Goldman Sachs'
proposal,
entirely
outside of any
public
scrutiny. (The
later public
questions are
as if by rote:
the fix was
already in.)
On Friday,
July 17 the
Fed's Thomas
Baxter wrote
to Scott
Alvarez that
the
transaction
would be
public
announced the
next Monday --
AFTER the
Fed's
"additional
information
request" --
based on a
long voicemail
from Harvey
Schwartz of
Goldman Sachs.
(Page 59 of
FOIA response
to ICP).
Alvarez was on
the phone with
"Esta of GA
and Rodge
Cohen."
Alvarez said
he was willing
to talk with
Goldman Sachs
on Sunday,
July 19. Cohen
had written to
Alvarez:
"In
view of the
various
communications
on Friday and
the intended
announcement
of the deposit
assumption
transaction on
Monday, GS
believes that
it must decide
over this
weekend
whether it can
proceed as
scheduled and,
as a matter of
fairness and
transparency,
what it can
tell GE. As we
have
discussed,
this
transaction
appears to be
a centerpiece
of the GE
restructuring.
We would
therefore most
appreciate the
opportunity to
have a
conference
call as soon
as possible
over the
weekend to
obtain as much
clarity as
possible as to
timing and
other relevant
matters.
We apologize
for intruding
into your
weekend and
thank you your
consideration
of this
request."
(Page 65 of
FOIA
response.)
The reference
to "fairness
and
transparency"
was apparently
without irony.
But Goldman
stood the Fed
up.
But this
announcement
was postponed.
Alvarez wrote
on July 20
that "Rodge
just sent a
note that GS
wants to
postpone
signing the
deal with GE
and the
announcement
for 2 to 3
weeks." More
review
continued,
outside of
public
scrutiny.
Alvarez made
himself
available on
Sunday, July
26. But to no
avail.
The
deal was
publicly
announced on
August 13 and
Goldman Sachs
on August 18
submitted the
apparently
pre-approved
application.
Inner City
Press / Fair
Finance Watch
submitted a
comment and
FOIA request
(delayed until
now); the end
of the FOIA
response has a
redacted
reaction to
the "public
comment." Now
others have
commented and
a campaign has
begun. But has
the Fed
already made
up its mind?
On
Goldman Sachs,
Federal
Reserve's
Initial FOIA
Response to
Inner City
Press on GE
Capital Bank
by Matthew
Russell Lee
On
October 20,
the Federal
Reserve asked
Goldman Sachs
five
questions, but
not on the
predatory
lending issues
raised:
"October
20, 2015
This letter
relates to the
proposal by
Goldman Sachs
Bank USA (“GS
Bank”), New
York, New
York, to
assume certain
deposits and
acquire
certain assets
of GE Capital
Bank (“GE
Bank”),
Holladay,
Utah, pursuant
to section
18(c) of the
Federal
Deposit
Insurance Act.
Based on
staff’s review
of the current
record, the
following
additional
information is
requested.
Please provide
responses to
all of the
following
questions,
including
those in the
confidential
annex. Please
provide
relevant
supporting
documentation
as
appropriate.
Further
information
may be
required as
staff
continues its
review of the
proposal.
1.
Explain how
the proposed
acquisition of
GE Bank’s
retail deposit
platform is
consistent
with GS Bank’s
2015-2016
Strategic Plan
(“Strategic
Plan”) and
specifically
which parts of
the Strategic
Plan the
proposed
acquisition
would
facilitate.
Also, explain
the
aforementioned
in the context
to GS Bank’s
ongoing
business
plans. Provide
a copy of the
Strategic
Plan.
2.
Discuss how GS
Bank’s level
and
composition of
assets and
funding would
change over
the next three
years. Provide
a table that
depicts the
asset and
funding types
and respective
amounts for
years ending
in 2016, 2017,
and 2018. In
addition,
provide annual
balance sheet
and income
statement
projections
for 2016,
2017, and
2018.
3.
Discuss how GS
Bank’s
customer base
would change
over the next
three years.
4.
Provide a
description of
the general
backgrounds,
and roles and
responsibilities
of the GE Bank
employees to
be hired by GS
Bank.
5.
Indicate the
approximate
number of
retail
accounts to be
acquired from
GE Bank and a
general
description of
the types of
accounts.
Provide an
estimated
number of
retail
accounts that
GS Bank
expects to
have by
year-end 2016,
2017, and
2018."
Inner City
Press still
had its
pending
Freedom of
Information
Act request;
Fair Finance
Watch and
others,
including
NCRC, asked
the Fed to
extend its
comment
period, which
has now been
done, until
October 30,
with the Fed's
FOIA response
to Inner City
Press due on
October 16.
But as of
October 17, no
response from
the Fed,
despite this
letter:
"Re:
Freedom of
Information
Act Request
No.
F-2015-0336
Dear Mr. Lee,
On September
2, 2015, the
Board of
Governors
(“Board”)
received your
electronic
message dated
September 2,
pursuant to
the Freedom of
Information
Act (“FOIA”),
5 U.S.C. §
552, for the
entirely of
the
“Application
by Goldman
Sachs Bank USA
for the
Acquisition by
Purchase and
Assumption of
Certain
Deposit
Liabilities
and Certain
Very Limited
Non-Financial
Assets of GE
Capital Bank,”
and for all
records
reflecting FRS
communications
with Goldman
Sachs for the
past twelve
(12) months.
On September 3
and September
9, the Board
provided you
with the
public
portions of
the
application.
Pursuant to
section
(a)(6)(B)(i)
of the FOIA,
we are
extending the
period for our
response until
October 16,
2015, in order
to consult
with two or
more
components of
the Board
having a
substantial
interest in
the
determination
of the
request.
If a
determination
can be made
before October
16, 2015, we
will respond
to you
promptly.
It is our
policy to
process FOIA
requests as
quickly as
possible while
ensuring that
we disclose
the requested
information to
the fullest
extent of the
law.
Very truly
yours,
/signed/
Jeanne M.
McLaughlin
Manager,
Freedom of
Information
Office"
But
even by
October 16, no
response from
the Fed. Only
this from
Goldman Sachs,
only
snail-mailed
by its
counsel:
Goldman
Sachs' 2d
Reply to Inner
City Press, As
Fed Withholds
FOIA Documents
by Matthew
Russell Lee
On
October 13
Inner City
Press
published the
Federal
Reserve's
communications
with the CIT
Group's
outside
counsel,
which shows
how the
release of
public
documents is
allowed by the
Fed to be
delayed. CIT
made
disingenuous
requests for
confidential
treatment of
information
that could not
be withheld,
without any
repercussion.
They were
rewarded with
FOIA appeal
denials by Fed
Governor Jay
Powell; now
Goldman is
trying to
withhold
information
that should be
public. Will
there be any
repercussion
or
accountability?
Watch this
site.
Revealed:
Federal
Reserve Asking
CIT Group
About Inner
City Press
FOIA Request:
Now Goldman
Sachs? by
Matthew
Russell Lee
After
requests from
Fair Finance
Watch, NCRC
and other NCRC
members, the
Federal
Reserve
belatedly
responded:
Comments
regarding this
application
must be
received..
on or before
October 30,
2015."
Just last
week, the Fed
told Inner
City Press a
comment it
submitted on
Goldman Sachs,
with new Home
Mortgage
Disclosure Act
data, was
"untimely" --
"Dear Mr.
Matthew Lee,
Executive
Director Inner
City
Press/Fair
Finance Watch
We acknowledge
receipt on
September 22,
2015 of your
email dated
September 22,
2015
("Comment
Letter"),
commenting on
the
application
filed by
Goldman Sachs
Bank USA...
The public
comment period
for this
application
ended on
September 19,
2015. Since
your Comment
Letter was
received after
the end of the
public comment
period, it
will not be
made a part of
the record of
this
application
unless the
Board in its
sole
discretion
determines to
consider your
late comments.
However, you
previously
submitted
timely
comments that
have been made
part of the
application
record that
the Board will
consider."
Now
it must be.
Inner City
Press made a
similar
request to the
New York State
Department of
Financial
Services and
on September
25, some
information
was released
-- not enough
-- and the NYS
comment period
was extended
for 30 days.
NYSDFS
Senior
Attorney
George Bogdan
wrote:
"Dear
Mr. Matthew
Lee: Your FOIL
request has
been granted
in part. My
response
letter and 2
Goldman Sachs
documents are
attached to
this e mail.
Also note that
the comment
period for the
Goldman Sachs
application
has been
extended by 30
days. An
official
notice for the
extension will
be posted
online in the
DFS Weekly
Bulletin for
the week
ending
September 25,
2015."
While Inner
City Press
prepares a
FOIL appeal,
why hasn't the
Federal
Reserve even
ruled on its
FOIA request,
and extended
the comment
period like
its state
counterpart?
We'll have
more on this.
On September
22, 2015, the
Federal
Reserve
belatedly
released the
2014 Home
Mortgage
Disclosure Act
data. A quick
review of the
lending of
Goldman Sachs
Bank USA in
the New York
City
Metropolitan
Statistical
Area shows the
Goldman Sachs
focus which
should require
publish
hearings in
this case.
Fair Finance
Watch, hours
after the data
was released,
has commented
to the Federal
Reserve at the
highest level
that "in the
New York City
MSA in 2014,
for
conventional
home purchase
loans (Table
4-2), Goldman
Sachs Bank USA
made 45 such
loans to
whites, only
two to African
Americans and
only one to a
Latino. For
refinance
loans (Table
4-3), Goldman
Sachs Bank USA
made 16 loans
to whites and
NONE to
African
American or
Latinos. This
is
inconsistent
with the
demographics
of the New
York City MSA
and with other
lenders'
records; it
further
militate for
the timely
requested
public
hearings."
Goldman Sachs
has purported
to respond to
the comments
of Inner City
Press / Fair
Finance Watch
by releasing a
small amount
of the
withheld
information,
and arguing
that what the
wider Goldman
Sachs does
cannot or will
no be
considered by
the Federal
Reserve on
this Bank
Merger Act
application by
Goldman Sachs
Bank. We've
put Goldman
Sachs'
response
online, here.
It says:
“FFW
states that
the audio
released by
examiner Ms.
Carmen Segara
requires an
extension of
the comment
period and a
public
hearing... GS
Bank believes
the issue is
outside the
scope of the
statutory
factors for
Board
consideration
under the Bank
Merger Act...
Goldman Sachs
Bank USA ('GS
Bank') hereby
submits its
response to
the three
comment
letters,
submitted on
September 2,
September 3
and September
9, 2015 (the
'Comment
Letters'), by
the Inner City
Press's Fair
Finance Watch
('FFW')....
"FFW
makes
accusations of
'predatory
practices' in
the 'mortgage
field' and
'municipal
finance,' and
states that
there are a
number of
compliance
settlements
that must be
reviewed in
connection
with the
Application.
FFW references
several
articles
related to
lawsuits,
settlements
and other
events, all
but one of
which involve
Goldman Sachs
but not GS
Bank. GS Bank
respectfully
submits that
such comments
are not
substantiated
by specific
arguments or
facts. GS Bank
notes that
none of the
articles
relate to GS
Bank itself,
and believes
these issues
are outside
the scope of
the statutory
factors for
Board
consideration
under the Bank
Merger Act.”
Goldman Sachs
is arguing
that the acts
of a parent
company cannot
be considered
when its bank
applies to buy
($16 billion)
in insured
deposits, an
absurd
argument. FFW
has submitted
another
comment to the
Fed, including
that
"ICP
has received
by mail from
Goldman Sachs'
counsel a
purported
response which
claims that
issues ranging
from conflict
of interest
and
under-regulation
by the FRB
(evidenced for
example by the
audio leaked
by
whistleblower
Carmen
Segarra) is
not cognizable
under the Bank
Merger Act -
an absurd
argument. The
FRB would be
the decision
maker,
therefore such
issues must be
addressed.
"Goldman
Sachs
cavalierly
states that
since it
withdrew some
of its
indefensible
requests for
confidential
treatment of
its
application,
that issues is
resolved. It
is not - too
much is still
being
withheld.
Significantly,
Goldman Sachs
has offered no
explanation of
the specious
requests for
confidential
treatment it
made, denying
commenters
access to
information
during the
comment
period. As
others now
argue, the
comment period
would be
extended and
hearing held."
Inner City
Press will be
covering this
wider National
(Community
Reinvestment
Coalition)
protest, in
which it
joins; it has
also submitted
more comments
to the New
York State
regulator, in
a proceeding
currently
slated to come
to a head on
September 28,
the first day
of the UN
General
Assembly
debate.
Goldman
Sachs'
Response to
Inner City
Press / Fair
Finance Watch
Comments on GE
Capital
Application,
Sept 1...
by Matthew
Russell Lee
As
Inner City
Press exposed
last month,
Royal Bank of
Canada jumped
the gun and
began doing
business with
City National
Bank without
any Federal
Reserve
approval (see
Los
Angeles Times,
here.)
Now,
even as New
York
regulators
says their
comment period
on Goldman
Sachs' GE
Capital
proposal
extends at
least through
September 28,
Goldman has
published fine
print notices
in the New
York Post and
a newspaper
in Utah
saying the
Federal
Reserve will
stop listening
on September
19.
Really? After
the Fed made
Goldman Sachs
a bank holding
company with no public
comment period
at all, so
Goldman could
get a
bail-out?
After the
Fed's coziness
with Goldman
Sachs was
again
demonstrated,
by the audio
taped by
then-Fed
examiner
Carmen Segarra?
Inner City
Press
immediately
submitted a
Freedom of
Information
Act request
for all of
Goldman Sachs'
GE Capital
application
and related
records. The
Federal
Reserve has
provided a
heavily
redacted copy,
on which Inner
City Press /
Fair Finance
Watch has
commented to
the FRB in
Washington:
"Among
many other
things,
Goldman Sachs
believes it
can withhold
the volume of
deposits it
seeks to
acquire from
GE Capital
Bank, WHAT is
seeks to
acquire (and
what not to
acquire) from
GE Capital
Bank, its
number of
employees in
Utah, the
contact people
on its
application,
the number of
non profit
organizations
it tells the
FRB it serves
on the board
of --
presumptively
public -- and
even the NAMES
of the
exhibits it
seeks to
withhold
entirely. This
is abusive and
unprecedented
and the FRB
must, in
response, have
the comment
period begin
again.
Otherwise,
applicants
only benefit
by making
absurd and
abusive
requests for
confidential
treatment.
There is much
more to be
said,
including at
the public
hearings ICP
is requesting,
but it is
imperative
that the Board
act on this as
quickly as
possible."
Goldman
Sachs' Heavily
Redacted
"Confidential"
Application to
the FRB to
Acquire GE
Capital Bank
Deposits
by Matthew
Russell Lee
When
Goldman Sachs
became a bank
holding
company
literally
overnight in
2008, Inner
City Press /
Fair Finance
Watch and
others
including NCRC
asked the Fed
how
this was done
with no public
comment period
at all.
The answer, it
seems, is to
be found in
the audio
leaked by
Carmen Segarra
of the Federal
Reserve,
showing
further Fed
favors for
Goldman Sachs.
With
this history,
and Goldman's
history in
predatory
lending with
Litton
Servicing and
as an
underwriter, see Occupy Wall Street video here,
and UN
/ migration
connection
here, it
seems clear
that the Fed
must hold
public
hearings on
Goldman Sachs'
GE Capital
application,
when it is
filed.
But with the
Federal
Reserve, you
can never be
too sure, or
too careful.
When Community
Bank System of
upstate New
York filed
with the Fed
nine answers
to questions
asked after
Inner City
Press'
challenge, it
tried to
withhold fully
eight of the
nine
responses. More
here.
Inner City
Press
immediately
filed a
Freedom of
Information
Act request
for the whole
submission -
and even the
Federal
Reserve saw
through
Community Bank
System's
absurdly --
and tellingly
-- overbroad
withholding,
releasing all
but one part
of one of the
eight withheld
responses. But
since then,
all the Fed
has done is
seek a mere
antitrust
control
commitment.
Here's
is the Federal
Reserve's
letter to
Inner City
Press granting
most of its
FOIA request:
Freedom
of Information
Act Ruling
Rejecting
Community Bank
System
Withholding 8
of 9 Responses
on Oneida
Ap... by Matthew
Russell Lee
here
is the now
unredacted
version of
Community Bank
System's
submission.
Unredacted
Version of
Community Bank
System's
Responses on
Oneida, After
ICP's FOIA
Request by
Matthew
Russell Lee
We'll
have more on
this.
Background:
The largest
bank merger
recently
proposed, that
of Royal Bank
of Canada and
affluent-focused
Los
Angeles-based
City National
Bank, has
since April
been the
subject of a
Community
Reinvestment
Act challenge
by Fair
Finance Watch.
The LA Times
has reported
on the "letter
from the Fed
[which] asks
the banks to
respond to
questions
raised in
written
comments by
[FFW].
Spokesmen for
the banks
declined to
comment....
Fair Finance
Watch, a New
York advocacy
group for
minorities,
questioned a
deal between
the banks in a
June 11
comment letter
to the Fed."
Inner City
Press first
put that Fed
letter online,
here; then
Canada's
National /
Financial Post
reported
without credit
it had
"obtained" it.
By contrast,
in the pending
proposal of Community Bank System - Oneida, the Syracuse
Post-Standard
disclosed
that "Inner
City Press
forwarded the
letter to news
outlets. Some
of the Fed's
questions
focus on
whether
Community
could
improperly
control
matters at
Oneida in
advance of the
acquisition. Community
is working on
Fed's
questions,
said Hal
Wentworth,
Community's
senior vice
president for
retail
banking."
One common
theme is that
non-control
(and therefore
antitrust)
laws are being
violated. One
difference is
that Community
Bank System
does comment
to the media
-- if only to
blame
the messenger
-- while
larger RBC and
CNB do not.
Arrogance?
On
Community Bank
System's
blaming the
messenger, FFW
has commented
to the Fed
that it will
"will comment
again when
Community Bank
System I has
provided a
copy of its
response to
the FRS'
questions of
July 13.
Beyond the CRA
and
impermissible
“control”
questions
raised
therein, we
wish at this
time to raise
the issues
that, in a
public
response to
ICP's
comments,
Community Bank
System's SVP
for retail
banking said
the following,
in a prepared
statement no
less:
'In a
statement
today, Hal
Wentworth,
Community's
senior vice
president for
retail
banking, said
that Inner
City Press is
not a local
group and
pointed out
that letter
was the only
one filed on
the Oneida
deal. "This
activist does
not do
business with
either Oneida
or Community
Bank."'
If it
would be
inappropriate
for Community
Bank System to
comment on or
disclose
information
about its
customers, in
this context
the same
applies to the
above-quoted,
which,
separately, is
reminiscent of
human rights
abusing
countries
emphasizing
where the
rights groups
who study and
report on them
are based."
Now Community
Bank System is
trying to
withhold eight
of its nine
responses;
Inner City
Press is
challenging
this under the
Freedom of
Information
Act, comparing
Community Bank
System's
outrageous
withholding at
the Fed with
other banks,
and with
Community Bank
System's to
the OCC, more
here.