| Merger Application by
Misnamed Bank of Hope Challenged by Fair
Finance Watch Now Snail Mail Lies
by
Matthew Russell Lee, Patreon Book
Substack
FEDERAL
COURT,
June 12 – How automatic do
banks now think merger
approvals are? How automatic
does the FDIC make them? There
is a new test case, before the
FDIC, to which Fair Finance
Watch has filed:
a timely first comment opposing and
requesting an extension of the FDIC's public
comment period on the Application by Bank of
Hope to acquire SMBC Manubank.
Bank
of Hope, it now emerges,
did a purported reply . But they
did not email it to Fair Finance
Watch. They put it in snail mail, two full
days after it was dated. They
bemoan HMDA data - and it
is signed not by a CRA officer
or CEO, but by "Chief
Risk Officer" Thomas
P. Stenger. They view
CRA as a risk. As well
they should,
given their approach.
The application was on the FDIC's website
where a public comment period running through
March 27 . These comment, and supplements to
come, were
timely.
Fair Finance Watch, which
commented to the FDIC that its proposal to
eliminate public notice of branch applications
violates the CRA, noting the FDIC's rationale
that it receives few public comments, hereby
timely informs the FDIC that it is troubled by
Bank of Hope's lending record and is
requesting public hearings and denial of this
application.
In
2024 Bank of Hope in New York made 12
mortgage loans to whites - but NONE to
African Americans. Meanwhile it mad 315
loans to Asians.
Nationwide in 2024 Bank of Hope made
33 mortgage loans to whites, none to African
Americans, and 533 loans to Asians.
More than half of Bank of
Hope's loans to Asians nationwide were in
New York, versus one third of its loans to
whites - and nowhere did it lend to African
Americans. Can this comply with CRA and the
fair lending laws?
As
it turns out, the FDIC cannot even comply
with FOIA. As Fair Finance Watch filed
its challenge, Inner City Press submitted a
FOIA request to the FDIC seeking the full
application and related communications.
The FDIC's response
was telling: rather than produce a single
document, it sent an interim letter claiming
the request for the application itself was
"premature" and deflecting to its San
Francisco Regional Office, while demanding
more specificity on the communications
request or it would close the file entirely.
The FDIC's "premature" dodge is legally
dubious. The agency's own regulation, 12
C.F.R. § 303.8(a), concerns records
available after "final disposition" of an
application — but this application is still
pending. More fundamentally, FOIA provides
an independent statutory right of access
that no internal agency regulation can
eliminate.
The
FDIC used to allow simple requests for public
portions of application by clicking a button on
its website. They eliminated
that, and now this. It is a race
to the bottom. Inner City Press
has responded to the FDIC - watch
this site.
FFW notes again in the FDIC's RIN
3064-AG10: "the FDIC has received a limited
number of public comments in response to
subpart C applications.... Therefore, the FDIC
is proposing to eliminate the public notice
and related public comment period from subpart
C and to make conforming changes to subpart A
of 12 CFR part 303 of the FDIC
Rules."
See, e.g., Sept 10, 2025: https://www.americanbanker.com/opinion/the-fdic-is-undercutting-a-key-element-of-the-cra
The Community Reinvestment Act specifies
that "the appropriate Federal financial
supervisory agency shall (1) assess the
institution's record of meeting the credit
needs of its entire community, including low-
and moderate-income neighborhoods, consistent
with the safe and sound operation of such
institution; and (2) take such record into
account in its evaluation of an application
for a deposit facility by such
institution." That is,
the only enforcement mechanism of CRA is its
consideration on applications for deposit
facilities: branches, and proposed mergers
like this one.
But now the FDIC has moved to
eliminate public notice and public comment on
banks' proposals to expand. The
above-quoted reasoning is that few comments
are filed. So, that is now changing. And so is the
FDIC - get
worse, daily, on not only CRA but also FOIA.
As
of June 13, Inner City Press still
had not a single page from the FDIC.
There will be more coming.
***
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