of Montreal Hides Reply to M&I Merger Protest Under CRA, Fair
March 20 -- Faced with Community Reinvestment Act protests to
the proposed acquisition of M&I by Bank of Montreal and its
Harris Bank, the Federal Reserve earlier this month asked for a
description of the banks' “policies, procedures and practices to
ensure compliance with the fair lending laws.”
/ Fair Finance Watch had raise to the Fed, for example, that in the
Chicago area “Bank of Montreal's Harris Bank in 2009, the most
recent year for which Home Mortgage Disclosure Act data is available,
denied the conventional home purchase loan applications of Latinos
2.52 times more frequently than those of whites. An even more extreme
disparity exists for African Americans in the Gary Indiana MSA.”
when Bank of
Montreal's law firm Sullivan & Cromwell sent its answer to the
Fed to Inner City Press, as required, it blacked out more than half
of the response, including the entire section entitled
“Self-Assessment and Monitoring,” more than a page long. Click
to see banks' response as provided to Inner City Press.
has challenged the “radical redaction” of the fair lending and
branch closing response of Bank of Montreal under the Freedom of
Information Act, and argues that the comment period, set to close on
March 22, cannot close while this information is being withheld.
law requires the Federal Reserve to consider the Community
Reinvestment Act (CRA). On CRA ratings, Harris has a “Low
Satisfactory” rating in lending, investment and service in
Wisconsin, M&I's headquarters, and a Low Satisfactory under the
service test in adjacent Indiana.
notes that the official whom Bank of Montreal has assigned to merger
integration, Cecily Mistarz, was previously in charge of strategy for
“Harris Private Bank, a unit that provides wealth management
services to affluent individuals and families” -- giving rise to
concerns that if run by Bank of Montreal, the resulting bank would
turn away from low and moderate income communities.
The banks' logos, withholding of basic information not shown
performed relatively worse than all lenders, as a group, in the
Milwaukee MSA in 2009 with respect to lending to African-American
borrowers. Harris Bank issued only 0.30 percent of its prime loans to
African-American borrowers, compared to 2.69 percent of all lenders'
prime loans to the same borrower group. In addition, Harris Bank's
market share of loans to African-American borrowers was just 11
percent of its market share to white borrowers. Harris effectively
made zero percent (just one loan) of all loans to African-American
borrowers and 0.62 percent of all loans to white borrowers in the
lending, Harris Bank's performance in 2009 was significantly worse
compared to all lenders in the Milwaukee MSA as a group, in providing
small business loans less than $100,000. Harris Bank issued 65
percent of its small business loans as loans less than $100,000; in
contrast, all lenders in Milwaukee, as a group, issued 85 percent of
their small business loans as loans less than $100,000.
also notes that despite M&I not having paid its TARP bail out
back, the CEO of M&I stands to get a $18 million payout from the
2010 HMDA data
has just been obtained by Fair Finance Watch, and analysis will be
submitted to the Federal Reserve and other regulators, in Wisconsin
Press is aware of comments being submitted
or prepared in Missouri, Indiana, Wisconsin and beyond, and argues
that the comment period, set to close on March 22, cannot close while
this information is being withheld. Watch this site.
* * *
Rating Banks, Chase & Goldman Slammed
-- Even after the financial industry meltdown
based on predatory lending, the Bloomberg administration in New York
City on March 7 publicly opposed a proposal local law that would rate
banks on community service before the City does business with them.
that “banks are heavily regulated,” despite
the finding that lack of regulation allowed banks, many based in New
York, to engage in Ponzi scheme like trading of predatory mortgages.
that it would be hard to replace a bank if it were
disqualified. First, given Community Reinvestment Act grade inflation
at the federal and state level, disqualification of any large bank
would seem sadly unlikely.
the City has qualified 35 banks, ranging from small banks like
Ridgewood Saving Bank up to Deutsche Bank, HSBC, Citibank, JPMorgan
Chase and “Goldman Sachs Bank,” of which Council member Leroy G.
Comrie asked, “I wonder why we are still doing business with them?
I don't understand, I would use stronger language but it's Monday
noted by Inner City Press, sold a stake to Liby's
Bank is among the larger foreclosers, with little accountability.
Citigroup's predatory lending arm CitiFinancial is so disgraced it
has been renamed One Main and still can't be sold off.
devolved into claiming that only two or three banks can do the City's
business, although she didn't name them.
In hearing room, Al Vann et al listen to Bloomberg's
Treasurer (c) MRLee
There was talk of
the Department of Finance, and of DoF's Commissioner being required
to answer more questions on Thursday in “Emigrant Savings Bank, the
Council's temporary chambers.”
The bill was
not slated for a vote
at the hearing; there will be more on this, especially the national
implications, represented on Monday by NCRC.
asked if the DoF's lobbyist would engage with national
groups around the federal Community Reinvestment Act. “I don't know
when CRA is up for renewal,” he replied.
stretched on, more and more Council members came in, perhaps sensing
Bloomberg's weakness, ranging from Joel Rivera and Helen Foster of
The Bronx through Brad Lander to Lewis A. Fidler.
that last night he went to a “nice Mexican
restaurant,” and found the Bloomberg administration's health
ratings useful. “But it would confuse consumers” when applied to
banks, Bloomberg's Treasurer said.
Domenic Recchia introduced the law, and Ricchia specifically
denounced JPMorgan Chase as not being willing to modify loans in New
York City. As Inner City Press came in to the drab hearing room, in
250 Broadway's 16th floor, another
attendee asked, “Is this the hearing about Chase Bank?”
* * *
Missions, US Says Bailed Out Banks
When JPMorgan Chase wrote to countries'
Missions to the UN and told them accounts would be closed in March
2011, several countries complained, to the UN and to the “host
country,” the United States.
Patrick Kennedy came to the UN in New York to
speak to countries' Ambassadors about Chase's move. Afterwards, Inner
City Press asked Kennedy if he -- or Hillary Clinton or Treasury
Secretary Timothy Geithner, both of whom Kennedy said were involved
-- had spoke with JPMorgan Chase.
have had discussions with the major banks," Kennedy answered, later
confirming that yes, this
included Chase. But what was the response of Chase, whose CEO Jaime
Dimon is often rumored to be a line for an appointment by the Obama
cannot tell a bank what to do.” Inner City Press
immediately asked, What about the banks which took bailouts and still
owe TARP money to the US and its taxpayers? "Could the government use
he was not
“technically competent to get into that level of detail," and told
City Press to ask the Treasury Department official who had also come
to the UN. Video on Inner City Press YouTube channel here.
this Treasury Deparment official was Mark Poncy of
the Office of Strategic Policy, Poncy never came to speak to the
he thought the UN should go forward and re-rent
space inside the UN under its Capital Master Plan to JPMorgan Chase,
when this bank was turning its back on Missions of the countries
which make up the UN.
“Ask the UN,”
said Kennedy, who has responsibility at the State Department for
Management, including at the UN. At the US Mission to the UN in New
York, the Management position has remained with only an interim
person, the genial but part time Professor Joseph Melrose.
the UN's noon
briefing, Inner City Press did ask Ban Ki-moon's spokesman Martin
Nesirky if the UN would give space to JPMorgan Chase in the
Secretariat building when it re-opens.
Nesirky said. But Chase is already in talks with the UN as to which
space to get in the repaired building -- not, apparently, the fourth
floor space it previously had, but some other location.
not comment on negotiations. But is Chase's closing of
UN Mission's accounts, Inner City Press asked, even part of the
negotiations? Nesirky seemed to say he would look into this.
in re-entering the Secretariat building when it
re-opens: Chase also has a branch on the first floor of the DC-1
building which houses the UN Development Program. Many countries'
Missions to the UN opened accounts at Chase because they were thus
inside the UN. Will the UN allow this to continue?
At UN, Patrick Kennedy, spokesman Mark
Kornblau & Joseph Melrose: where's Chase?
City Press asked Iran's Permanent Representative
as he came out if he thought Chase should continue to remain in UN
buildings. No, the Ambassador said, UN space should go to banks
which will deal with UN Missions.
He spoke of
the UN Federal Credit
Union -- currently embroiled in a dispute about the account of the UN
Staff Union -- and was asked if the UN should withdraw its own funds
from a bank which in effect redlines Missions, like Chase.
about “transfer fees” while
Turkey's Deputy Permanent Representative shrugged that “there are
Turkish banks in New York.”
Permanent Representative Vitaly Churkin, asked in front of the Security
Council about JPMorgan Chase's move, laughed and said "the ruble is a
very strong currency," when you have the ruble you don't need anything
else. But the others? Watch this site.
the following arrived:
Not Reply [at] un.org
Date: Fri, Jan 14, 2011
at 8:05 AM
Subject: Your questions on Chase Bank
To: Inner City
in reply to your questions at the noon
US briefing about their accounts being
shuttered think the UN should withdraw all its accounts with Chase.
Has this been broached with the administration? Being weighed at all?
raised by one Member State delegate in the
briefing with Ambassador Kennedy. The UN Secretariat has not been
approached in this matter.
in the UN building after the CMP?
UN building design includes space provision for
banks. No agreements have been entered into with any banks for this