| Federal Reserve Banks Have
on Board Bankers Seeking Merger
Approvals So FOIA Campaign
by
Matthew Russell Lee, Patreon Book
Substack
FEDERAL
COURT,
Jan 12 – Amid welcome focus on
Federal Reserve independence,
from a community perspective
Fair Finance Watch and Inner
City Press have raised a
different question to the
Federal Reserve Board:
How is it that
Federal Reserve Banks which
review and approve banks'
mergers, and decide what
questions to ask, who to send
copies to and what information
can be withheld from the
public, have the very banks
they regulate on their boards
of directors?
The question
arose this month on the
protested application by
Fulton Financial to buy Blue
Foundry Bank. FFW filed
comments with the Federal
Reserve Board on December 8,
after the proposal was
announced but before the banks
applied. (FFW has adopted this
new comment-early policy in
light of regulators including
Fed Governor Michelle W.
Bowman saying applications
will be reviewed and approved
more quickly).
It was the
Federal Reserve Bank of
Philadelphia that responded,
when Fulton applied on
December 23. On
January 7, Fulton sent FFW a
copy of its response to
December 23 questions from the
Federal Reserve Bank of
Philadelphia, a copy of which
was not sent to FFW on
December 23, as required by
the Federal Reserve's rules
against ex-parte
communications.
Fulton's response sought to
withhold, about branch
closings, even the timing for
decision. But in response to a
recent FFW / Inner City Press
FOIA request, Fifth Third was
required to disclose the
street addresses of the 80
branches it would close if
allowed to acquire
Comerica. So why
did the Federal Reserve Bank
of Philadelphia not send
timely protester FFW a copy of
its question or "Additional
Information" letter - and why
is it allowing Fulton to be
more secretive even than other
banks?
Well,
Inner City Press looked at the
Board of Directors list of the
Federal Reserve Bank of
Philadelphia and finds on it
"Curtis J. Myers, President
and Chief Executive Officer,
Fulton Bank and Fulton
Financial Corporation,
Lancaster,
Pennsylvania."
Isn't this
a conflict of interest? Or,
what safeguards have the
Federal Reserve put in
place?
Further
cursory review by Inner City
Press finds bank
representatives on the boards
of directors of all 12 of the
Federal Reserve Banks, and of
their branches - including
Huntington Bank, which the Fed
recently allowed to do a $7
billion merger without even
applying to the Fed, and
including National Bank
Holdings Corporation
(recipient of a recent merger
approval), M&T Bank
(represented on two separate
boards), Stockyard Bank &
Trust and many others,
including:
Peapack Private
Bank & Trust; First
Financial Bancorp Cincinnati,
Ohio ; First
Horizon Bank; BankUnited,
Inc.; Northern Trust, Renasant
Bank, United Community Bank;
Southern Bancorp, Inc.; Home
BancShares, Inc.; First
National Bank of Omaha;
National Bank of Texas;
Columbia Banking System, Inc.,
and Chief Executive Officer
Columbia Bank; and Cathay Bank
- again, among others.
Inner City Press
has submitted a Freedom of
Information Act request to the
Board, alongside its second
timely comment opposing Fulton
- Blue Foundry, for " all
records reflecting FRS
including FRB of Philadelphia
considering of possible
conflicts of interesting in
having Fulton's CEO on the FRB
of Philadelphia's Board of
Directors while the FRB of
Philadelphia considers
Fulton's merger applications
including deciding how to
treat adverse comments and
whether to send copies of AI
letters and allow withholding
of answers to AI letters. The
request, for context, includes
FRS consideration of bank and
bank holding company
representation on the boards
of the other Reserve Banks."
Watch this
site.
***
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