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CommunityBank of Texas After Money Laundering Case Hit by Protest by Fair Finance Watch

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

FEDERAL COURT / S Bronx, Jan 26 – 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

   Now as the fourth CRA challenge of 2022, Fair Finance Watch with Inner City Press on the FOIA has filed comments with the Federal Reserve against CommunityBank of Texas, fresh off a money laundering / Bank Secrecy Act settlement, with a disparate record: "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."


As to the Fed, which denies FOIA requests after five months, here, on August 25, this strange response: "Dear Mr. Lee,     This is to acknowledge receipt of your email to the Office of the Secretary for the Board of Governors of the Federal Reserve System (Board) dated August 17, 2021, regarding the proposal of South State Corporation to merge with Atlantic Capital Bancshares, Inc., and thereby indirectly acquire Atlantic Capital Bank, NA.  To date, South State Corporation has not filed an application with the Federal Reserve System.  Currently, the public comment period for the proposal will end on September 20, 2021. 

   If an application is filed within the next three months from the date your comment was sent, your correspondence will be made part of the record, and the Board will evaluate your comment.  We will also send a copy of the public portions of the application as soon as possible after the application is received.     Sincerely,     Jennifer Snow  Senior Examiner  Supervision, Regulation, and Credit  Federal Reserve Bank of Atlanta     Integrity. Excellence. Respect."

How can there be a comment period with expiration date, if there is no application? Inner City Press asked, and on August 26 is told:

"Our procedures provide that advance notice in the Federal Register may be requested in advance of a filing. The comment period end date applies to the Federal Register notice, which was filed in advance of the application being filed."

   What - the comment period running to its conclusion, before any application to comment on is available? This seems far too bank-friendly. How does it relate to the administration's Antitrust Memo? 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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