| CommunityBank
of Texas on Money Laundering as Protested
Used Paid Letters Fed OKs
By Matthew
Russell Lee, Patreon Story
BBC
- Guardian
UK - Honduras
- ESPN
FEDERAL COURT / S
Bronx, Sept 14 – Whether or
not the U.S. Community
Reinvestment Act will be again
enforced until the new
Administration and its
regulators remains an open
question. The same is the case
about money laundering
As
the fourth CRA challenge of
2022, Fair Finance Watch with
Inner City Press on the FOIA
filed comments with the
Federal Reserve against
CommunityBank of Texas, fresh
off a money laundering / Bank
Secrecy Act settlement, with a
disparate record, see below.
In June the banks
bragged without irony about a
new name, Stellar Bank (why
not "Redlining Bank" or
"Laundering Bank"?) - and
claimed they'd close by the
end of June.
"The parent
companies of CommunityBank of
Texas and Allegiance Bank have
announced that the resulting
company of their merger will
be named Stellar Bank.
The rebrand will take effect
once the merger completes,
expected by the end of June."
Well, Fair
Finance Watch's protest was
still pending at the end of
August 2022. CBTX is still
blowing hot air instead of
improving its record: "CBTX
CEO Robert Franklin said the
banks’ executives “don’t know
of any reason why this deal
wouldn’t get approved.”
“Our understanding is that we
are in line. We just don’t
know where we are in line, and
there’s some 20 to 25 deals
pending right now before the
Fed." Really?
"From Fair
Finance Watch / Inner City
Press' protest: "This is a
timely first comment on, the
Applications of CBTX, Inc.,
Beaumont, Texas; to merge with
Allegiance Bancshares, Inc.,
and thereby indirectly acquire
Allegiance Bank, both of
Houston, Texas. As an initial
matter, this is a request that
the FRS immediately send by
email to Inner City Press all
non-exempt portions of the
applications / notices for
which the Applicants have
requested confidential
treatment. Fair Finance Watch
has been tracking both banks,
and has found their lending
patterns
troubling. In
Texas in 2020, CBTX's
CommunityBank made 65 mortgage
loans to whites with 54
denials. Meanwhile to African
Americans it made only THREE
loans, while denying fully ten
applications. A referring
should be made to the DOJ for
fair lending
violations.
In Texas in 2020, Alliance
Bank made 257 mortgage loans
to whites with 38 denials.
Meanwhile to African Americans
it made only SIX loans, while
denying fully seven
applications. Again, a
referring should be made to
the DOJ for fair lending
violations. Public
evidentiary hearings are
needed - especially because,
and specifically on,
CommunityBank's violations of
the Bank Secrecy Act:
"WASHINGTON—The Office of the
Comptroller of the Currency
(OCC) today announced a $1
million civil money penalty
against CommunityBank of
Texas, N.A., Beaumont, Texas,
for violations of the OCC’s
Bank Secrecy Act
regulations. The OCC
found that CommunityBank of
Texas failed to adopt and
implement a Bank Secrecy
Act/Anti-Money Laundering
system of internal controls to
assure ongoing compliance with
the Bank Secrecy Act and its
implementing regulations. Such
deficiencies resulted in
CommunityBank’s failure to
timely file complete
suspicious activity reports
for approximately $100 million
of suspicious activity.
The OCC’s civil money penalty
is separate from, but
coordinated with, the
settlement between
CommunityBank and the
Financial Crimes Enforcement
Network (FinCEN), which is
also being announced
today."
FFW and Inner City Press have
been deeply concerned about
the rush by the Federal
Reserve's to rubber-stamp
mergers by redliners, money
launderers and predatory
lenders. This has been killing
the Community Reinvestment Act
and we timely request public
hearings. The comment period
should be extended;
evidentiary hearings should be
held; and on the current
record, the application should
not be approved."
In
response? CBTX put in a
one-line letter of support
from a hospital, and another
bragging about other support
from "corporate sponsors such
as Valero, ExxonMobil, Entergy
and many
others." That was from
Nutrition & Services for
Seniors. Who else? And how
does this rebut money
laundering and redlining?
To the
Federal Reserve, apparently,
paid letters win the day. On
September 14 the Board
approved, stating "The Board
received 18 public comments on
the proposal from nonprofit
organizations and other
interested organizations and
individuals. The vast majority
of commenters expressed
support for the proposal.22
Most of the commenters
commended CommunityBank for
its dedication to community
service, philanthropy, and
community reinvestment as well
as the bank employees’
commitment to volunteering. In
particular, the commenters
noted service of CommunityBank
executives on the boards of
nonprofit organizations.
Commenters also praised both
CommunityBank’s and Allegiance
Bank’s creative community
development financing
activities and funding for
affordable housing. The Board
received one adverse comment
on the proposal. The commenter
objected to the proposal,
alleging that in 2020, both
CommunityBank and Allegiance
Bank made fewer home loans in
Texas to African American
individuals as compared to
white individuals.23 The
commenter also noted a 2021
civil money penalty against
CommunityBank by the OCC for
violations of the OCC’s Bank
Secrecy Act (“BSA”)
regulations." Then it
approved. Watch this site.
On
February 17 Fair Finance Watch
filed timely comments opposing
the application with the
self-described new FDIC. We'll
see. Watch this site.
Inner City
Press (and Fair Finance Watch,
on the HMDA) will have more to
say about this. Watch this
site.
***
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