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Rogue Regulator Otting Withholds Merger Notices Since August 17 So All Comment Periods Close

By Matthew R. Lee, Video, FOIA fee denial

SOUTH BRONX, SDNY, Oct 5 – With Comptroller of the Currency Joseph Otting moving to undermine the US Community Reinvestment Act, on August 21 he engaged in a cynical tour of Jamaica, Queens with Rep. Gregory Meeks while his OCC was also refusing to consider a CRA protest filed less than 30 days after People's Bank's application was filed and that, later, available. See below.

  Now on October 5, 2019, on Otting's OCC website the most recently Weekly Bulletin of pending mergers, each with a 30 day comment periods is dated August 17. That is to say, all of the merger of which Otting's OCC is providing public have comment period which are closed. Those with open comment periods are not disclosed. This is criminal.

  On September 3, Otting rang up another death knell to accountability and judicial review, getting the CSBS' lawsuit about his sure to be ghoulish fintech charter dismissed as not ripe. A D.C. federal judge has again shot down a lawsuit that seeks to block the federal government from granting specialized national bank charters to fintech firms, saying the Conference of State Bank Supervisors is still jumping the gun by suing over a charter that no one has even applied for.  In a ruling Tuesday, U.S. District Judge Dabney Friedrich dismissed because the "claims remain unripe.” This is four months after U.S. District Judge Victor Marrero of the Southern District of New York allowed the New York Department of Financial Services to proceed with its challenge to the fintech charter.  In her ruling on Tuesday, Judge Friedrich said she “respectfully” disagrees with Judge Marrero’s decision to the extent it conflicts with either of her dismissal decisions in the CSBS cases.  Inner City Press goes with the SDNY. In DC the OCC is represented in-house by Jonathan V. Gould, Bao Nguyen, Gregory F. Taylor, Hannah Hicks, Peter C. Koch, Ashley W. Walker, Gabriel A. Hindin and Michael K. Morelli -- some of these are involved in trying to exempt the OCC from FOIA by denying fee waivers, even for merger applications. Otting is destroying the OCC, and wants to destroy the CRA. 

  Mere hours after refusing to consider an actual CRA comment, Otting issued this: "Comptroller of the Currency Joseph Otting today participated in a tour of New York neighborhoods to see firsthand the success of Community Reinvestment Act (CRA) activity and discuss how CRA regulations can promote more lending, investment, and services, where they are needed most.  'Here in New York, we saw great examples of community and bank partnerships to conduct CRA activity that helps meet important needs of underserved neighborhoods,' Comptroller Otting said following the tour. 'We also discussed challenges communities, advocates, and bankers face in lending, investing, and providing services that can be addressed in part by modernizing CRA regulations.'" This is fraud.

 In June 2019 Otting denied access to documents about whom he meets with which Inner City Press requested back in January 2019. This while he had made the OCC start rejecting timely CRA comments on mergers and on Fifth Third's lateral move to the less regulated OCC charter, asserting that he has unfettered discretion to consider such comments.

  Now it gets worse - Otting is citing a 30 day comment period as a basis to refuse to consider comments even when by his own OCC's letter it was timely, less than thirty said. Inner City Press / Fair Finance Watch was sent this by the OCC on August 21: "People’s United Bank, National Association, Bridgeport, Connecticut filed its Application with the CCC on July 18, 2019, and published its first public notice of the application on July 17, 2019. The 30-day public comment period ended on August 15, 2019. The 0CC made information concerning the application publicly available in the July 20, 2019 Weekly Bulletin and, on July 23, 2019, posted the public portion of the application to the OCC’s Freedom of Information Act Electronic Reading Room. Your comment was submitted on August l6, following the close of the comment period on August 1 As a result, the comment was not timely and the OCC will not consider this comment in its review of the pending application." Do the math. Then impeach Otting.

 On August 15-16, Inner City Press / Fair Finance Watch, less than 30 days after the application was filed, submitted this to the OCC including its Barry Wides in DC: "August 15-16, 2019    

 Office of the Comptroller of the Currency  Northeastern District Office  Deputy Comptroller, Kristin Kiefer  Acting Director for District Licensing, Marva V. Cummings  340 Madison Avenue, Fifth Floor  New York, NY 10173-0002  and Barry Wides, DC

   Re: Timely Initial Comment on Application of People's United Bank to acquire United Bank     Dear Deputy Comptroller Kiefer, Ms. Cummings, Mr. Wides and others in the OCC:     

This is a timely first comment opposing and requesting an extension of the OCC's public comment period on the Application by People's United Bank to acquire United Bank.       The OCC states that "when a public notice is published, the public has 30 days to submit a written comment to the OCC." See here.       This comment is timely. While the "public" notice in the Hartford Courant is behind paywall - we are noting that for the record, to be acted on by the OCC like its now routine late updating of its online Weekly Bulletins - dispositively, the OCC web site says "Filing Status:     Action Date Receipt 2019-07-18." July 18 plus 30 days is August 17. Even if one ignores the filing date for comment period start date, July 17, plus 30 days is August 16. This comment is timely.     

Add to the above, for the record, that the OCC under Comptroller Otting has reversed years of OCC precedent and refused FOIA fee waivers for copies of the application to comment on. This comment is timely,and the lawless policy reversal(s) must be reversed.       

People's United is getting worse and worse.          In the the New York City MSA in 2017, the most recent year for which HMDA data is publicly available - the comment period should be extended until the delayed 2018 data is available - People's United made 83 home purchase loans to whites, only seven to Latinos and only FOUR to African Americans. Its denial rate for African Americans was 2.81 times higher than for whites - worse than its peers, by far. This comment is timely, an evidentiary hearing is needed; on the current record the application should be denied.     For refinance loans in the New York City MSA in 2017, People's United made 85 loans to whites, only five to Latinos and only six to African Americans.  This is systematic redlining; this proposed acquisition could not legitimately be approved and People's United should be referred for prosecution for redlining by the Department of Justice and CFPB.     People's United record is hardly sufficient in the Hartford MSA where it now proposes to acquire United Bank. In 2017 in the Hartford MSA, People's United made 139 home purchase loans to whites and only 10 to African Americans and only five to Latinos. Its denial rate for African Americans was a whopping 4.71 times higher than for whites - worse than its peers, by far.    Again, this is systematic redlining; this proposed acquisition could not legitimately be approved and People's United should be referred for prosecution for redlining by the Department of Justice and CFPB.      

See also, for the record, "People’s United Bank is growing, but at the expense of branches and possibly jobs.  The Bridgeport-based subsidiary of People’s United Financial is looking to acquire the parent company to United Bank in Hartford for roughly $759 million by the end of the year, and executives have confirmed that the merger would result in cuts.  “There is a lot of overlap, and we’ve done quite a bit of homework and due diligence already, but we will finish that work with the United (Bank) team and we will make decisions about which will close,” People’s United CEO Jack Barnes said.          In this context, the comment period should be extended so that public evidentiary hearings can be held, and the application should be denied." Watch this site.

  Now in a promotional brochure about his attack on CRA, Otting has misstated what the CRA statute says, and significantly so. His brochure said that the law requires the regulators to "consider the CRA RATING in connection with certain licensing applications." Uploaded by Inner City Press on Scribd here.

  In fact, the process is that CRA issues are considered on merger and charter conversion and other applications, not just ratings. That is a safe harbor, something repeatedly considered, fought off and rejected. Now fraudulent comment generator Otting is simply changing the law. We'll have more on this. And on this:

 On August 9 Otting issued an Orwellian summary of a visit to Atlanta ostensibly to help the CRA be more transparent: "WASHINGTON — Comptroller of the Currency Joseph Otting, today visited Atlanta to tour neighborhoods that have benefitted from activities encouraged by the Community Reinvestment Act (CRA) and areas that could benefit from additional CRA activity.  “Today, we saw what great things can be accomplished when banks, civil rights organizations, nonprofit groups, and local advocates work together to meet the needs of their communities,” Comptroller Otting said following the tour. “We also discussed how current CRA regulations hamstring efforts that could revitalize these areas and bring even more lending, investment, and service to where they are needed most.”  The Comptroller was joined on the tour by John Hope Bryant, CEO and Founder of Operation HOPE, Ambassador and former Atlanta Mayor Andrew Young, and representatives from area community groups, redevelopment organizations, and banks. The group began their tour of Atlanta from the Martin Luther King Sr. Community Resources Collaborative and visited a HOPE Inside office at [a shopping center]... “The places we visited today confirm how CRA has been a force for good for the past 40 years,” the Comptroller said. “Our goal now is to strengthen CRA so that it continues to encourage the flow of billions of dollars into our communities and neighborhoods each year. We can modernize CRA regulations to encourage banks to do even more by clarifying what counts for CRA credit, updating where activity qualifies, making evaluations of bank CRA performance more objective, and reporting results in a more timely and transparent manner.”  More transparent? From a man who withholds all his information, after generating fake comments to support the cash out merger of One West when he ran it? And which unnamed banks were along on this tour?

  After first denying a Freedom of Information Act fee waiver for these documents, and now for all bank merger applications is obvious retaliation, on June 20 the OCC wrote to Inner City Press:

"Dear Mr.Lee: This is in response to your letter dated January 16, 2019, which was received in my office on January 17, 2019 for processing under the Freedom of Information Act (FOIA), 5 U.S.C. 552. You requested copies of records sufficient to show all of Comptroller Otting's scheduled meetings, appointments, and scheduled events from the date he became Comptroller to the date of your response including but not limited to Outlook calendar entries and daily briefing books for Comptroller Otting on those dates. You seek records of any kind, including paper records, electronic records, audiotapes, videotapes, photographs, data, and graphical material. Our determination concerning your request is as follows:

1. Mr. Otting’s Calendar is published on the OCC’s Website in the Electronic Reading Room located at  Certain entries have been deleted under the authority of 5 U.S.C. 552(b)(2) and 12 C.F.R. (b)(2), related solely to the internal personnel rules and practices of an agency which covers confirmation numbers, ticket numbers, dialin numbers and PIN codes for telephone conferences; 5 U.S.C. 552(b)(5) and 12 C.F.R. 4.12(b)(5) inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency which are considered deliberative in nature; 5 U.S.C. 552(b)(6) and 12 C.F.R. 4.12(b)(6), personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy which covers personal, non-government issued telephone cell phone numbers; and, 5 U.S.C. 552 (b)(8) and 12 C.F.R. 4.12(b)(8), contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions;.
2. Briefing books or materials submitted to the Comptroller in preparation for meetings appearing on his calendar and are marked “MATERIALS ATTACHED” are withheld under the authority of 5 U.S.C. 552(b)(5) and 12 C.F.R. 4.12(b)(5) inter-agency or intraagency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency, which is consistent with Department of Justice policy.
3. The OCC does not capture audiotapes or videotapes of meetings.
4. Telephone messages made to the Comptroller are also not captured.
5. The OCC does not maintain transcripts.
6. Handwritten notes are not maintained by the Comptroller or the OCC. 7. The OCC does not sweep the personal email accounts of its employees. 
8. A Vaughan index is not required to be produced at the administrative level of processing FOIA requests.

Once you have reviewed the calendars for Mr. Otting and have identified specific topics you you’d like to review, please submit a targeted FOIA request and we will once again search our records. Please note that you requested a fee waiver that I denied.  This was because the basis for your fee waiver did not constitute an official reason as set forth in our regulations to justify a fee waiver.  Upon receive a request for possibly vast amounts of data, you need to adequately justify any such request for a fee waiver.  Due to the volume of requests the OCC is now receiving, each request for a fee waiver is being scrutinized very closely and such waivers are not automatic.    Additionally, keep in mind that the less targeted a FOIA request is, and the possible large amount of data that must be gathered and reviewed, the less likely a request for expedited processing will be granted.  It is just physically impossible."

   Impossible for an ex-banker turned regulator, gone rogue. Otting has also denied access to documents about the application to the OCC for WSFS to acquire Beneficial Bank and close 25 branches. Inner City Press requested the records months ago, along with a request for a waiver of fees as the other Federal bank regulators grant it and as the OCC has until now.

  But Otting is different. First he denied a fee waiver on Inner City Press' request for his calendar. Then he relented on that, after Inner City Press citing case law and precedent. But seemingly in retaliation, he has denied access to a merger application subject to public comment. Denial here on Scribd.

  And now, dated June 11 but e-mailed later, a final denial, after putting Inner City Press through three rounds of more and more detailed argumentation - just to waste its time until long after Otting rubber stamped the merger - accusing Inner City Press of not "explaining how the application submitted by WSFS would contribute significantly to the public’s understanding of the operations or activities of the OCC. As such, your request for a fee waiver is denied. Until you contact the OCC Disclosure Services office with assurance that you will pay associated fees, FOIA request # 2019-00206 will not be processed."

  So the OCC thinks it can hinder public review and public comment by changing the law and its own pre-Otting practice.

  On 1 June 2019 the most recent OCC Weekly Bulletin of bank merger applications on which the comment periods are 30 days is from May 4. Inner City Press tweeted photo here. That is to say, the applications are being hidden until the comment period closes.But we'll have more on this, now that Otting's OCC has fully shown itself.

  Ironically the grounds cited for the FOIA fee waiver denial is that releasing this information about a merger subject to public comment would not increase the public's understanding. This shows Otting contempt for CRA - and for the public. Now it's ever worse. His claim is that while he might have to wave fees for OCC document, he can withhold / hinder the release of the bank's underlying application. But how can the public access what his OCC does on the application, without seeing the application? In a Friday afternoon dump on May 17 this came in from the OCC: "Mr. Lee,  I am writing to follow-up on the FOIA Appeal you submitted regarding the fee waiver denial for request 2019-00206-F.  In the denial, Mr. Frank Vance identified his concern about lack of information for the third public interest factor – contribution to public understanding.  However, on appeal, I am providing you an opportunity to address the first factor – how the requested records specifically concern identifiable operations or activities of the government and the second factor – how the requested records are likely to contribute to an understanding of specific government operations or activities.  In your appeal you assert that disclosure of the information sought will document and reveal the activities of the federal government, including how the OCC reviews CRA and branch closing aspects of the merger between WSFS and Beneficial.  However, the records you requested are for the withheld portions of the application filed by WSFS.  Your request does not seek any records of OCC action before or after receiving the WSFS application.  See Judicial Watch, Inc. v. Reno, No. 00-0723, 2001 WL 1902811, at *10 (D.D.C. Mar. 30, 2001) (upholding agency's assessment of fees, reasoning that while agency's response to citizen letters regarding Cuban emigré Elian Gonzales would likely contribute to understanding of agency actions, incoming citizen letters to agency on that topic do not).  Emphasis added to DOJ summary.  If you would like to supplement your appeal with additional information that demonstrates how the WSFS application itself contributes significantly to public understanding about the operations or activities of the OCC, please do so." We'll have more on this. Inner City Press initially filed this appeal with Otting, et al.:

"Dear Comptroller Otting:    

Inner City Press traditionally has received fee waivers from the Office of the Comptroller of the Currency under 5 U.S.C. § 552(a)(4)(A)(iii) and 12 C.F.R. § 4.17. Waivers were granted on the basis of similar or identical language contained in the instant Freedom of Information Act (FOIA) request, which is now the subject of OCC’s waiver rejection. Outrageously, on Inner City Press' FOIA request for the portions of the WSFS - Beneficial merger application that the applicants unilaterally requested confidential treatment for, your FOIA Manager Frank Vance writes:   

 "Concerning the third consideration, contribution to public understanding, we examined whether or not disclosure of the requested records would contribute to the understanding of the public at large, as opposed to the understanding of the requester or a small number of interested persons.  In other words, we considered whether or not you demonstrated how contribution to public understanding outweighs personal benefit to you.  I find that you did not demonstrate this component; therefore, you did not satisfy the regulatory requirement of 12 C.F.R. 4.17(b)(4)(i).  In light of this, there is no need to analyze your justification with respect to 12 C.F.R. 4.17(b)(4)(ii). "     

So you are claiming that the public is not interested in, and should be constrained in access, the bank merger applications on which the public has a right to comment. You are claiming that to get any OCC review of the often outrageously overbroad requests for confidential treatment of the banks you supervise, the public has to pay untold fees. This is a new low, and Inner City Press is appealing.     Inner City Press Is Eligible for a Fee Waiver     In accordance with 5 U.S.C. § 552(a)(4)(A)(iii) and 12 C.F.R. § 4.17, Inner City Press is eligible for, and requests, a waiver of fees associated with processing its request for records. The subject of this request—the review of a merger to close at least 25 bank branches -- concerns the operations of the federal government, and the disclosures will likely contribute to a better understanding of relevant government procedures by the general public in a significant way. Moreover, the request is primarily and fundamentally for non-commercial purposes.     Inner City Press requests a waiver of fees because disclosure of the requested information is “in the public interest because the disclosure . . . [i]s likely to contribute significantly to public understanding” of government operations or activities.

 Specifically, the disclosure of the information sought under this request will document and reveal the activities of the federal government, including how your OCC reviews the CRA and branch closing aspects of the merger.      As discussed below, Inner City Press has both the ability and the intention to effectively convey the information it receives to the public.     Inner City Press does not have a commercial interest in the requested information. This request is primarily and fundamentally for non-commercial purposes. Inner City Press does not have a commercial purpose and the release of the information requested is not in its financial interest. Inner City Press’s mission is to engage in cutting-edge investigative reporting focused, fair lending, development, and government accountability advocacy. Core to its mission is to educate the public about government activities and to ensure the accountability of government officials. Inner City Press uses the information gathered, and its analysis of it, to educate the public through reports, press releases, or other media. It also makes materials it gathers available on its public website and promotes their availability on social media platforms. Inner City Press has demonstrated its commitment to the public disclosure of documents and creation of editorial content. For example, Inner City Press’s website contains dozens of articles describing the operations of the federal government from a unique perspective, including about the OCC:  
 In SDNY FreddieMac Via FHFA of Otting Says Its Negligent Late Objection Is Fine As Otting Lawless

 And this.

   Inner City Press’s website contains many more examples demonstrating its ability and intention to inform the public about government activities, including specifically related to how the subject of the instant FOIA request spent his time at OCC.     Accordingly, Inner City Press qualifies for a fee waiver.    

Significantly, well before this outrageous denial which now longer keeps secret the requested documents, even the OCC wrote "your correspondence of March 8 is more robust and sets forth with reasonable specificity the grounds to justify the OCC's granting of the fee waiver. Therefore, your request for a fee waiver with respect to FOLA request 2019-00104 is granted. The OCC's Disclosure Services office will remove the matter from "Hold" status and proceed to process the request."    

Of course, even in that case [about your / Otting's schedule] in the two month since our letter we have not received a single document from your OCC.          

There can be no doubt that Inner City Press qualifies for a waiver based on the foregoing. Moreover, Inner City Press’s long track record of fee waivers is further evidence of our current eligibility. In particular, we have demonstrated repeatedly our intent and ability to inform the public about government operations and that our requests for information are not primarily in our commercial interest.     

We find your OCC's FOIA and other practices outrageous and demand expeditious ruling on this appeal and release of the already long delayed documents.    Matthew Lee, Esq., Executive Director Inner City Press / Fair Finance Watch." Watch this site. 

  Otting has been sued again for offering a CRA-lax fintech bank charter. The lawsuit, filed September 14 by the New York State Department of Financial Services, says Otting "puts New York financial consumers—and often the most vulnerable ones—at great risk of exploitation by federally-chartered entities improperly insulated by New York law. The OCC’s reckless folly should be stopped." It's Vullo v Office of the Comptroller of the Currency, 18-cv-8377, U.S. District Court, Southern District of New York. On May 2, SDNY Judge Victor Marrero allowed DFS' suit to go forward. He wrote, "As a result of the Fintech Charter Decision, New York State's regulations for over "600 non-bank financial services firms" are all at risk of becoming null and void. (Complaint ~ 10.) Of course, certain steps, namely the application for, and then the granting of, an SPNB charter must occur before a fintech firm can flout New York's laws. But those steps do not stymie DFS's standing. For both steps, DFS benefits from the supposition that the government enforces and acts on its recent, non-moribund laws. See Hedges v. Obama, 724 F.3d 170, 19 7 ( 2d Cir. 2 013) . Specifically, DFS alleges that OCC has invited fintech companies to its offices to discuss SPNB charters, potentially indicating at least some demand for, and interest in, such charters." Sounds like Otting, the secret meetings of the type the OCC has YET to disclose in response to Inner City Press' FOIA request which was delayed by the OCC disputing fee waivers as it never had before, We'll have more on this. The OCC's spokesman Bryan Hubbard had said the agency "is confident in its authority to grant national bank charters including special purpose national bank charters to companies that are engaged in the business of banking, meet the qualifications for becoming a national bank, and apply to conduct business as part of the federal banking system. The agency will vigorously defend that authority, but will not comment on pending or potential litigation.” Otting, as we've noted, as a pre-OCC history of generating dubious comment supporting mergers like his OneWest with CIT.


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