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UN GATE / SDNY COURT, June 16 – On May 29 Joseph Otting had his last day as US Comptroller of the Currency, a position he has misused to attack the Community Reinvestment Act he came to despise as head of OneWest Bank.

   A week later Ottting cashed out, taking a paying position on the board of directors of Black Knight, described as a fintech.
 
  But if bank regulators have a cooling off period, how can the just former Comptroller joint a fintech, an industry he and his successor worked and work to get into the national banking world?

 Now Otting's handiwork, undermining the CRA, is itself under attack: "Stand up against Redlining! Support H.J. Res. 90 and Reverse the OCC's Harmful Rule to Gut the Community Reinvestment Act!  Sign on due June 19, 2020  Cosponsors: Chairwoman Waters, Meeks, Cárdenas, Cleaver, Davis, Heck, Garcia (Chuy), Garcia (Sylvia), Gonzalez, Kennedy, Lee, Maloney, Norton, Pressley, Price, Velázquez, Vargas. 
Dear Colleague:     The Community Reinvestment Act (CRA) is an essential civil rights law that was enacted in 1977 to prevent the discriminatory practice of redlining and to require banks to invest and lend responsibly in low- and moderate-income (LMI) communities where they are chartered. In the midst of the COVID-19 pandemic, the Office of the Comptroller of Currency (OCC) recently rushed out a final rule – without the support of Board of Governors of the Federal Reserve System (Federal Reserve) and Federal Deposit Insurance Corporation (FDIC) – that undermines the CRA and will harm low-income and minority communities that are already suffering during this crisis. We invite you to cosponsor a Congressional Review Act resolution (H.J. Res 90) we introduced to nullify this harmful rule.     Redlining is a harmful practice by which banks discriminate against prospective customers in nearby neighborhoods, often based on racial or ethnic background.

Researchers have found redlining persists in more than 60 metro areas across the country, finding black applicants were turned away by banks at significantly higher rates than whites in 48 cities, Latinx in 25, Asian Americans in nine and Native Americans in three. Meanwhile, 98 percent of banks, on average, have received a passing CRA grade since 2006.

 The implementation of the CRA must be strengthened to ensure banks are meeting the needs of all communities where they are located.     However, the OCC’s unilateral final rule will turn the Community Reinvestment Act into the Community Disinvestment Act. There are numerous problems with the OCC’s final rule, including:  Different Rules for Different Banks: All banks should be held to the same, high standard in terms of lending and investing in all communities where they are chartered. In an unusual step underscoring the concerns with the proposal, the FDIC and the Federal Reserve declined to join the OCC’s final rule, leading to possible regulatory arbitrage based on bank charter and a race to the bottom of weaker CRA standards when stakeholders have urged a clear and consistent application of the law across all banks. Insufficient Data: The OCC did not conduct sufficient analysis or collect sufficient data before proceeding with its final rule, making it difficult if not impossible to assess whether the new framework will drive more CRA dollars to low-income communities. In fact, the Final Rule concedes that the OCC will need to issue another notice of proposed rulemaking in the future to help set specific benchmarks, thresholds, and minimums required by their new CRA framework. Vague Infrastructure Investment Directive: The definition of essential infrastructure is still too vague and can be construed too broadly to not fully assist LMI communities. Incentivizes Large Deals: The OCC’s dollar-volume-metric for determining how well a bank is meeting its obligations under the CRA incentivizes large deals, as opposed to smaller and more continuous financial transactions that would benefit LMI communities. Combined with the OCC’s removal of the service test, which examines retail and community development services and is currently 25% of a CRA exam, this may lead to a decrease in bank branches in LMI communities. A wide range of stakeholders, including consumer groups, civil rights groups, and banking trades have criticized the OCC’s efforts. For example, a group of consumer and civil rights groups issued a statement, noting “The new [OCC] rules stick with an overly simplistic metrics system that creates a loophole for banks to exploit, allowing them to get a passing CRA rating by making investments in communities where they can reap the largest rewards, while leaving too many credit needs unmet for underserved consumers and neighborhoods.”[5]  Therefore, we urge you to sign on to H.J. Res 90 to nullify the OCC’s harmful rule on the Community Reinvestment Act. During these difficult times, Congress needs to send a strong message to the OCC, the Federal Reserve, the FDIC and other federal regulators that they should be doing all they can to help, not hurt, low- and moderate-income communities, and especially communities of color.   Sincerely,     MAXINE WATERS                 Chairwoman                                                              GREGORY W. MEEKS  Chairman, Subcommittee on Consumer Protection and Financial Institutions."

  As to Acting Comptroller Brian Brooks, Bloomberg reported that "[a]s Coinbase’s chief legal officer, Brooks was paid $1.4 million in salary -- separate from the stock options -- in the year and a half he spent with company, which had weighed seeking a charter through the OCC before making other moves to access the banking system... He still has stock and bond holdings between $1 million and $2.2 million. Because he’s acting comptroller -- not yet nominated by President Donald Trump to seek Senate confirmation -- he’s not required to take the ethics pledge that would limit his ability to work in lobbying after he leaves the job, according to an OCC spokesman. However, Brooks has submitted a letter through the agency’s ethics office outlining companies he’ll steer clear of because of potential conflicts of interest, including Amazon.com Inc., Bank of America Corp.’s Merrill Lynch unit, Coinbase and a number of other tech firms he’s worked with....  Otting, who left the job last month, wasn’t out of work long. He was tapped this week to join the board of Black Knight Inc., which provides software for the mortgage industry." Bloomberg did not delve into that conflict of interest. And what are the "other tech firms" as to which Brooks is acknowledging a conflict?

   The OCC wrote to Inner City Press, faux apologizing for withholding information it has requested about Otting until after he had left the agency. Inner City Press immediately wrote back requesting a copy of Brooks' ethics letter and list of companies as to which even he acknowledges a conflict of interest. So far, nothing. But we note, for example, that he was on the board of Avant. What else?

   Amid all this, Fair Finance Watch and Inner City Press / Community on the Move have launched a new project. And so far, Brooks' national banks have been among the worst. Watch this site.

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