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After Investors Bank Hit With FDIC Conditions, Delta of FIFA Scandal Change in Bank Control

By Matthew Russell Lee, Patreon Story Order
BBC - Guardian UK - Honduras - ESPN

FEDERAL COURT / S Bronx, Oct 9 – Whether or not the U.S. Community Reinvestment Act will be again enforced until the new Administration and its regulators is an open question. And not only the proposed acquisition of Investors Bank by Citizens Bank NA but also an application to change control of the FIFA scandal plagued Delta Bank of New York and Grand Cayman will be litmus tests.

Fair Finance Watch and  Inner City Press have filed with the Federal Reserve:

"This is a timely first comment opposing and requesting an extension of the FRB's public comment period on the Applications for a controlling stake in scandal-plagued Delta National Bank & Trust to be taken by a series of Brazil-based investors with their own issues.    Fair Finance Watch and Inner City Press have closely followed the FIFA corruption cases in which Delta prominently and shamefully figures. See, e.g.,  "One institution, Delta National Bank and Trust company, a small boutique bank that caters to wealthy Latin American clients and has offices in Miami, allegedly played an outsized role in the scandal. Authorities contend that Traffic International, a sports media company based in Brazil, shuffled at least $60 million in bribes and kickbacks to FIFA officials as part of an effort to win broadcast rights to FIFA tournaments and secure sponsorship deals.  Though Traffic also held an account with Citi in Miami, experts say its transfers through Delta should have raised flags, especially given the bank's history of misconduct. In 2003, Delta paid nearly $1 million after it was cited for failing to flag as much as $10 million in transactions tied to Colombian drug traffickers. Brazilian authorities have also launched investigations in the past into other Delta clients.  Related: SwissLeaks: How Banking Giant HSBC Helped 100,000 Rich Clients Dodge Taxes  When banks encounter questionable transactions, they are supposed to file suspicious activity reports. In the eyes of regulators, past scrutiny of a bank's practices should lead to stricter money-laundering measures and more reporting, but it appears that was not the case at Delta. As authorities determine whether charges will eventually be filed against any of the banks named in the indictment, they will likely consider the timespan over which the alleged misconduct occurred. The US says it dates back, in some cases, as long as 25 years."     See generally,  United States v. Webb (1:15-cr-00252) District Court, E.D. New York.

 The Fed has acknowledged receipt; the application says: "The Notificants are: Lucia de Campos Faria Junia de Campos Faria Ziegelmeyer Flávia Faria Vasconcellos Eliana de Campos Faria The FC Family Trust Claudia de Faria Carvalho. as primary beneficiary of the FC Family Trust The White Dahlia Company Inc.. as trustee of the FC Family Trust Interagency Biographical and Financial Reports (the "IBFRs") relating to the Notificants who are natural persons are submitted herewith as Confidential Exhibits II.A. I .a-e. Additional information regarding FC Family Trust and White Dahlia is provided in Confidential Exhibit II.A. i.e. Confidential Exhibit II.A.2 provides additional information regarding Mr. Faria's estate and the Notificants' holdings."

So it's all confidential? Inner City Press has filed a FOIA request.

Meanwhile, Investors Bank is one of the most disparate banks in New York State, where in 2020 it made only three mortgage loans to African Americans, while denying fully seven applications from African Americans. By contrast, it made 164 loans to whites while denying only 76 applications from whites.

  Inner City Press raised the 2019 disparities to the FDIC - and on July 30 was contacted by the FDIC that it imposed rare conditions on Investors. Letter here. This has now been raised on Citizens' application, to the OCC:

"Re: Timely First Comment Opposing Citizens to acquire Investors Bank

Dear Ms. Cummings and others in the OCC, including at "Large Banks": 

This is a timely first comment opposing and requesting an extension of the OCC's public comment period on the Applications by Citizens to acquire Investors Bank.  

  Before getting to the data, be aware that based on Fair Finance Watch's comments to the FDIC about Investors, it recently imposed a condition on Investors. Investors has yet to meaningfully implement the required improvements; this application should not be approved, much less at this time.    The FDIC wrote:

 "Matthew Lee, Esquire Executive Director Inner City Press/Fair Finance Watch  Dear Mr. Lee: We are writing to inform you that the FDIC approved Investors Bank’s application to acquire eight branches from Berkshire Bank. As part of the application review process, we investigated the issues you raised in your e-mail dated January 19, 2019... The Bank will develop and Board approve an Action Plan within 60 days of the  effective date of this Order to ensure that its home mortgage lending adequately  addresses the credit needs of all segments of its market areas." etc.

Citizens cannot, as of now, be allowed to acquire this hot mess.  As noted:  The applicant Citizens in 2020 in New York State based on its disparate marketing made 7183 mortgage loans to whites, with 3116 denials to whites -- while making only 323 loans to African Americans, with more than that in denials: 336.  

  Here's some of Investors' 2020 HMDA data:  Investors Bank in 2020 in New York State based on its disparate marketing made 164 mortgage loans to whites, with 76 denials to whites -- while making only THREE loans to African Americans, with SEVEN denials. This is far out of keeping with the demographics, and other lenders, in NYS - this is outrageous.

This is a pattern. Investors Bank in 2020 in New Jersey based on its disparate marketing made 1580 mortgage loans to whites, with 281 denials to whites -- while making only 64 loans to African Americans, with 28 denials. This is far out of keeping with the demographics, and other lenders, in New Jersey. The comment period should be extended; evidentiary hearings should be held; and on the current record, the application should not be approved."

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