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FDIC Backsliding With Otting To Deregulate Banks Raised in DC As CFPB Hides Mortgage Data

By Matthew R. Lee, Video, FOIA fee denial

SOUTH BRONX, SDNY, Dec 5 – With Comptroller of the Currency Joseph Otting moving to undermine the US Community Reinvestment Act, one of his moves this year has been to refuse to consider a timely CRA protest to People's United Bank by Inner City Press / Fair Finance Watch.

 Now the Federal Deposit Insurance Corporation is sliding toward joining Otting's assault on CRA, but was questioned this week in the US Senate:

Q: the FDIC could give the smaller banks that regulates the choice of opting into this new OCC led CRA regulatory framework or continuing to be examined under the current system. That could lead to a situation where banks themselves choose to participate in the model that gives them the best grade and not the one that best measures whether their activities are effectively addressing the needs of their communities.          If adopted, do you know what percentage of FDIC regulated banks would the choice to opt into the OCC approach?         

JELENA MCWILLIAMS:  So, the -- the proposal is still being worked. One of the options we considered was the opt-out for small banks -- I'm sorry, opt-in, opting into the new regime or keeping the existing regime. The main reason for the opt-in opportunity would be to provide an ability for small banks not to have to change their reporting requirements and their -- how they go through the analysis of what qualifies for the CRA. Small banks - the number of small banks will - if they decide to opt in would depend on what threshold we pick for the cut off.         

MENENDEZ:  So you don't know yet what number because you haven't decided on the threshold?         

MCWILLIAMS:  It's not - it's not firm. We are looking at numbers and making sure...        

MENENDEZ:  But I hope that other than - we want small banks, yes, to have less response - less necessity in terms of paperwork but we don't want them to have less necessity or obligation in terms of creating a portal of opportunity under the CRA. If most FDIC-regulated banks would be able to opt in, then aren't you - if that's what happens, then aren't you simply making a political calculation that best protects the interest of the banks you're charged with regulating over those who stand to benefit from a strong CRA rule. Isn't in essence the threshold going to determine whether that's the reality or not?         

MCWILLIAMS:  No, actually it is not. The reason that I'm willing to consider a reform to the Community Reinvestment Act is because the Act has not been revisited since 1995 by the regulators and Congress. You gave us the authority to take a look at the Act and make sure it serves its intended purpose.          Currently we have digital delivery channels for banks that are not necessarily accounted for appropriately in the current assessment areas. The way the deposit taking now takes place is everything gets attributed to a branch and now it will be the digital channels - excuse me. There's a lot of deposit taking that's taking place outside of this area and we want to make sure that under the reform of the CRA, those areas where the digital banks are functioning and offering - and taking deposits and offering services are served by the CRA."  But why then are the regulators like the OCC, now with the connivance of the CFPB, making it harder for the public to enforce CRA?

With the OCC yet to be sued for its contempt for the law, the Consumer Financial Protection Bureau under Kathy Kraninger issued 2018 Home Mortgage Disclosure Act data - with an interface without any racial or ethnic information unlike 2017 and every previous year, undermining the entire purpose of the HMDA law. See this page and see below.

  Now with this CFPB abuse still unaddressed, including in an evasive response from CFPB this week, from Capitol Hill, this: "United States Senator Elizabeth Warren (D-Mass.), member of the Senate Banking, Housing, and Urban Affairs Committee, and Representative Jesús “Chuy” García (D-Ill.), member of the House of Representatives Committee on Financial Services, today announced the introduction of the Bank Merger Review Modernization Act. The legislation would restrict harmful consolidation in the banking industry and protect consumers and the financial system from “Too Big to Fail” institutions, like those that caused the 2008 financial crisis. The upcoming merger between SunTrust Banks, Inc. (SunTrust) and BB&T Corporation (BB&T) will create the sixth-largest U.S. bank and first new Too Big to Fail bank since the financial crisis. Representatives Jan Schakowsky (D-Ill.) and Rashida Tlaib (D-Mich.) are original House cosponsors of the bill.  “Nearly two years ago, Chairman Powell confirmed my worst suspicions that the Fed has not declined a single merger request since before the financial crisis,” said Senator Warren. “The bill Congressman García and I are announcing today would ensure that regulators do their jobs by stopping mergers that deprive communities of the banking services they need, reward banks that cheat or discriminate against their customers, and risk another financial crisis.     “When big banks get bigger, consumers and taxpayers usually lose. We must protect our financial system by slowing down bank consolidation. This bill will help address this, taking the Fed and FDIC off autopilot and giving consumers a voice in reviewing bank mergers,” said Congressman García." This is one of the steps that is needed.

  After various attempts to get CFPB to acknowledge its outrageous move in disenfranchising grassroots groups from the data meant to benefit them, which we will leave UNdescribed for now, Inner City Press on November 7 submitted a FOIA request see below. The CFPB has acknowledged receipt, but says it has a unspecified backlog and has denied the request for expedited processing because it does not think redlined communities defending their rights and lives with the CRA is urgent.

Now on December 3 from the CFPB, more evasion with a list of downloaded and bookmarks that do not being to replace what CFPB unilaterally removed. Brenda Muñiz  Office of Public Engagement and Community Liaison  Consumer Financial Protection Bureau lists downloads and a pre-formatted search not even yet available. CFPB has now whitewashed data and protected banks and bank mergers for months. This must immediately end and those responsible be named and held accountable: Until the CFPB unilaterally decided to whitewash was had previously been available as an on-website, no-download / no-Excel search could show denial rates. This was and is an arrogant move by the CFPB which disempowers grassroots groups and makes it significantly more difficult for others, including journalists, to examine mortgage discrimination. We continue to demand reversal - and the names of and reasoning used by those at CFPB who decided to do this. Watch this site.

From CFPB's FOIA response, still nothing provided: "Dear Mr. Lee: This letter is to inform you that on November 8, 2019, the Consumer Financial Protection Bureau (CFPB) received your Freedom of Information Act (FOIA) request dated November 7, 2019.  Your request sought: [a]ll records regarding the CFPB's decision / action to make the 2018 Home Mortgage Disclosure Act data only available for download (the so-called data filter) rather then searchable and viewable in reports on the CFPB website as was the case for the 2017 data. Please be advised that the CFPB FOIA Office has a backlog of pending FOIA requests.  We are diligently working to process each request in the order in which it was received.  Your patience is greatly appreciated.  The CFPB FOIA regulations found at 12 C.F.R. Part 1070 specifically define “representative of the news media” as “any person or entity that gathers information of potential interest to a segment of the public, uses its editorial skills to turn the raw materials into a distinct work, and distributes that work to an audience.”  Based on the information contained in your request, the CFPB has granted your request to be considered a “representative of the news media"... Your request for expedited processing is Denied because you failed to demonstrate a particular urgency to inform the public about the government activity involved in the request beyond the public’s right to know about government activity generally." Really?

The request: "Dear CFPB Chief FOIA Officer:  Pursuant to the federal Freedom of Information Act, 5 U.S.C. § 552, I request from the CFPB any and all records as that term is defined in FOIA regarding the CFPB's decision / action to make the 2018 Home Mortgage Disclosure Act data only available for download (the so-called data filter) rather then searchable and viewable in reports on the CFPB website as was the case for the 2017 data.

     To assist you in rapidly providing the requested information - this is a request for expedited treatment given that the withholding in accessible format of the 2018 data each day hinders low income community groups from commenting on bank mergers, the only enforcement mechanism of the Community Reinvestment Act to prevent bank redlining - be aware that the issue has been raised to CFPB staff in a number of conference calls including most recently to, inter alia  Brenda Muniz, Tim Lambert [some names redacted in this format.]

  These CFPB staffers were directly asked by the undersigned who at CFPB made the decision to curtail availability of HMDA data in simple format on the website. Knowing which government agency official made such a decision is a sine qua non of FOIA: the information should be provided an expedite basis, as well as all related documents." Watch this site.

On October 12 Inner City Press reported a flood of identical comments *supporting* Kraninger and the CFPB like this one on HMDA: "Comment Submitted by Anonymous Sonnenburg, I appreciate the CFPB's recent willingness to reconsider and revise its prior rulemakings." This while CFPB is still withhold the basis race and ethic information from display on its website, raw data download only unlike previous years. This is an outrage - and its having impacts. The Federal Reserve, citing the CFPB, rubber stamped Hancock Whitney - MidSouth Bank, and is prepared to close its comment periods on Simmons - Landrum and other proposed mergers while the CFPB on September 7 is still saying this: "We will retire HMDA Explorer and its API Our tool for exploring HMDA data—and the Public Data Platform API that powers it—will be shut down in the coming months. We will post additional details as they become available.  The 2018 HMDA data include a number of new data points and, as a result, are not compatible with the multi-year functionality provided by the Public Data Platform.    The Federal Financial Institutions Examination Council (FFIEC) will publish a query tool for the 2018 data in the coming months, which will be available at  After the new query tool becomes available, the Bureau will retire the current HMDA Explorer tool and the Public Data Platform API  that powers it."  In the coming months? The CFPB has months to do this. They are intentionally making it more difficult for the public to access basic fair lending information.

 This is confirmed in a blithe "request for comments" that includes "the HMDA Platform allows users to produce and export custom data sets rather than relying on numerous static reports that few previously accessed. To enable external software developers to access some of the key services offered by the HMDA Platform, the Bureau publishes Application Programming Interfaces (APIs) that can be integrated into external websites, analytical tools, and industry software. The Bureau has innovated in other areas as well."

 Inner City Press has commented:   Dear Director Kraninger and others at CFPB:     On behalf of Inner City Press / Fair Finance Watch, which has reviewed and publicized HMDA data for years, this is a comment both on Docket No. CFPB–2019– 0048 and specifically demanding that CFPB's troubling whitewash of the 2018 HMDA data, refusing to make it simply available with race and ethnicity information, be reversed and the data made available as below.    Your proposal (mis) states that "tthe HMDA Platform allows users to produce and export custom data sets rather than relying on numerous static reports that few previously accessed.      That is false, and is also an unacceptable pretext to make race and ethnicity HMDA data less available.  As Inner City Press has previously written to CFPB staff, so far without action: Go to   Compare disclosure for 2017 (with race and ethnicity)      to 2018 - no race or ethnicity.     CFPB must make this basic information available, in simple format that can be used by grassroots groups. Already time is going by in which the 2018 data is ostensibly available but grassroots groups cannot access race and ethnicity information as they did before, which is among the goals of HMDA data.     Please explain when and where this information will be made available again.   Matthew Lee, Esq., Executive Director Inner City Press / Fair Finance Watch." Watch this site.

 Previously CFPB issued a rule relieving payday lenders of the duty to comply with the ability-to-repay standard for the CFPB’s short term lending rule of November 2017.

  Here's how the CFPB breezily put it: "The Bureau of Consumer Financial Protection is issuing this final rule to delay the August 19, 2019 compliance date for the mandatory underwriting provisions of the regulation promulgated by the Bureau in November 2017 governing Payday, Vehicle Title, and Certain High-Cost Installment Loans (2017 Final Rule or Rule). Compliance with these provisions of the Rule is delayed by 15 months, to November 19, 2020." Whats 15 months among friends?

The CFPB is also thumbing its nose at the US Administrative Procedures Act and proposing to undermine the Home Mortgage Disclosure Act.

CFPB is trying three separate but inter-related attacks. The first is to raise the threshold for reporting HMDA data, to exempt wither 36% or 53% of banks and credit unions, a proposal on which the comment period runs only to June 12, here. (Comments are going in from such banks as Village Bank and Hamilton Bank and even, incongruously, Brenda Muniz of the CFPB, see above.)

  Second is to weaken the "data points" which will be reported by those still required to under HMDA. The CFPB wants to drop such information as "reason for denial" and "debt to income ratio" - the very information that banks so often cite in response to CRA challenged by Fair Finance Watch and others, as justifying their disparities. Now the CFPB wants to not collect this supposed justification of disparities. Just trust us, is the message. Well, no. This comment period runs to July 8, here.

  Finally, without any comment period at all, the CFPB is eliminating the public's front door to the HMDA data, the HMDA Explorer web site that many community groups such as the hundreds that are members of NCRC use to assess banks in their communities. The CFPB wants to take even this away. They should be sued. There will be fight-back, under NCRC's TreasureCRA campaign. Watch this site - including on actual enforcement of CRA.


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