Inner City Press -- Investigative Reporting From the Inner City to Wall Street to the United Nations

As Fed Postpones Meeting, Capital One Spins Schedule, But Hana Approved

By Matthew R. Lee

SOUTH BRONX, February 8 -- Why did the Federal Reserve postpone its meeting on Capital One - ING from Wednesday afternoon for five days until Monday, February 13?

  Capital One's spokeswoman said “The board has informed us that the planned meeting for this afternoon has been rescheduled for Monday, February 13th. We understand that the delay is due to a scheduling conflict, and we look forward to their decision early next week."

  But there's a problem with this spin, that scheduling made it impossible. At 3:05 pm on Wednesday, Inner City Press got a voice mail from the Federal Reserve's Legal Division, Michael Waldron, about an application that ICP Fair Finance Watch had commented on some time ago: Hana - Korea Exchange Bank. The Board had just approved the application, Waldron said (without also stating any right to request reconsideration.)

In that Order Inner City Press / Fair Finance Watch is, yes, "the commenter." The Board lets Goldman Sachs off the hook (note 4) and ignores issues about Hana in Korea (note 7).

So if the Fed could approve applications on Wednesday afternoon but chose not to do so for Capital One, why not?

One can hope that the outrageous "document dump" of hundreds of pages on the eve of the Fed's scheduled February 8 meeting, which Inner City Press immediately raised to the highest levels of the Fed, combined with calls Wednesday from NCRC members to open the meeting, caught the Fed's attention.

Click here to view the Fed's February 7 FOIA Denial,saying there are 230 more pages withheld in full, and click here to view the redacted documents that the Fed provided to Inner City Press.

The Fed has a consumer complaint line, from which people were referred to the Board of Governor's own "comments" voice mail. This made some feel the Fed was being transparent. But why then close the meetings? And why take more than three to provide even the redacted documents it did on February 7, less than 24 hours before the Board intended to meet on, and presumably rubber stamp, Capital One's ING DIRECT application.

The Fed held ex parte communications with Capital One on November 21, writing a memo ostensibly as a tip of the hat to the rules against ex parte communications. Then the Fed withhold the summary under Exemption 4.

The Fed has even made withholdings from its own August 29, 2011 questions to Capital One. This is an outrage and is hereby being appealed from.

This last minute data dump is beneath the Federal Reserve - if that's even possible. The Fed is increasingly abusing and evading FOIA and this must be not only reversed, but explained and accountability imposed in response to this appeal. This information must be reviewed, and released and comment allowed thereon, by ICP, NCRC and others, before the Fed considers approving the Capital One - ING proposals.

As argued in Inner City Press' FOIA appeals, rather than going forward and rubber stamping Capital One's applications, the Fed should re-open its comment period

For the reasons of record, and as argued by NCRC, the Federal Reserve should re-open the comment period to fully consider Capital One's related proposal to buy the ex-Household predatory lending platform from HSBC, and the related stealth ING proposals.