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RBC Planning Bank Only For the Richest Highlights Community Reinvestment Act Fight

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - CJR - PFT

SOUTH BRONX, Feb 22 – Royal Bank of Canada has said openly it plans a new bank in the United States only for the most affluent. This steps right in the middle of a bank deregulatory move by U.S. Comptroller of the Current Joseph Otting, and comes after Fair Finance Watch and Inner City Press documented already disparate lending by RBC and its apparently not-enough Los Angeles-based prey, City National, here and here in the LA Times.

  Royal Bank of Canada plans to open a consumer bank in the United States early next year targeting wealthy clients, with the aim of expanding deposits, its chief financial officer said on February 21. “We want to broaden the product and service offering that we have (in the U.S.), similar to what we have in Canada,” CFO Rod Bolger said. RBC’s consumer bank would initially focus on high-net-worth clients in U.S. but eventually target the 'mass affluent' as well, he said.  RBC’s U.S. business, including City National bank, which it acquired in 2015, accounts for 23% of total revenue.

   This comes alongside the proposed Morgan Stanley acquisition of E-Trade, whose E-Trade Bank was almost shielded from the Community Reinvestment Act by Otting. Fair Finance Watch and Inner City Press will be raising the issues.

In April 2018 his OCC approved an application by E-Trade Saving Bank which Fair Finance Watch had challenged based on the bank having no fewer than six states rare "Needs to Improve" CRA ratings. FFW noted rare Needs to Improve ratings for the entire states of Arizona, Colorado, Florida, Georgia, Michigan and Oregon, and an undeserved “Satisfactory” for New York. Otting's OCC, after the approval, helpfully contacted E-Trade Bank to tell it that upon (Otting's) reflection, it was no longer even subject to the Community Reinvestment Act.

 Back in October 2018 Inner City Press asked the OCC for documents about this under FOIA - while the OCC has sought to evade by accessing fees, to this day. But in May 2019 while withholding 1000 pages the OCC released to Inner City Press, like a needle in a hay stack, its June 16, 2018 letter from Assistant Deputy Comptroller for Midsize Bank Supervision William Russell to E*TRADE's Karl Roessner telling him that E*TRADE's banks are exempt from CRA, here. After pushback, this was reversed. Now there will be more pushback - Inner City Press guarantees it, from Fair Finance Watch.

   Otting cashed out of his position with OneWest Bank in California by overseeing fake comments in favor its acquisition by the CIT Group.

   Then, emboldened, he devoted the Office of the Comptroller of the Currency to weakening or destroying the CRA which provides for the public process that he subverted with fake comments.

   Inner City Press, which opposed the merger and then pursued a Freedom of Information Act request for all documents about Otting's fraud, soon found its and Fair Finance Watch's comments to the OCC being rejected, or ignored, or returned. 

  While Inner City Press' FOIA requests get fee waivers from the Federal Reserve and a range of agencies in the US and beyond, Otting's OCC suddenly started denying them, hindering access to the merger applications on which CRA is enforced.   

Otting is trying to push through this CRA-killing proposal on a short comment period, cognizant of the other CRA, the Congressioal Review Act. But it is obvious that even banks want more time.

On January 26, in advance of Otting's belated January 29 House of Representatives appearance, Inner City Press / Fair Finance Watch submitted a formal comment, below. It included a demand that Otting recuse himself (not yet acted on) and a request for an extension of the comment period.

  Now on February 19 from FDIC, this: "FDIC and OCC Announce 30-day Extension of Comment Period for Proposed Changes to Community Reinvestment Act Regulations WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC) today extended the public comment period for proposed changes to the regulations implementing the Community Reinvestment Act (CRA) until April 8, 2020.  On December 12, 2019, the FDIC and OCC announced a proposal to modernize the regulations under the CRA and provided for a 60-day comment period following formal publication on January 9, 2020 in the Federal Register (85 FR 1204). The FDIC and OCC have now determined that a 30-day extension of the comment period is appropriate."

  So, April 9, more to follow. But Otting must still be recused. Here's from Fair Finance Watch's first comments (there's been a second):

 January 26, 2020  Re: Docket ID OCC-2018-0008 &  - total opposition to OCC/FDIC plan to weaken CRA 

To whom it may concern at the OCC and FDIC: On behalf of Fair Finance Watch, and Inner City Press, and in my personal capacity, this is a timely comment opposing the proposal by Comptroller Joseph Otting and the FDIC to weaken the CRA.

Enforcing the CRA including through commenting to the Federal Reserve and FDIC, and OCC under previous Comptrollers, the results have been new bank branches in the South Bronx, and lending and consumer protection commitments well beyond.  Some advocacy, from 2001, here;  2002 here (Wells Fargo);  jump cut to 2015, here (due to 5000 character restriction)  and more  

But since Otting became Comptroller, we have seen the CRA under attack. The E-Trade / Morgan Stanley proposal will be a litmus test. Watch this site.


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