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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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