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Community Reinvestment Act Reg Comments In As Fed Bowman Hopes Bank Showed Burden

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

FEDERAL COURT / S Bronx, August 9 – Whether or not the U.S. Community Reinvestment Act will actually be enforced under thus Administration and its regulators remains an open question. Mergers continue to be rubber stamped. But the agencies requested comments by August 5, and Fair Finance Watch and Inner City Press and others in NCRC have met the deadline, see below.

 Meanwhile, Federal Reserve Governor Michelle Bowman told the Kansas Bankers Association on August 6 she hoped that had commented in the "short comment period" to the regulators about supposed burden on them, speech on Fed website here: "I am concerned that the proposal does not adequately account for the costs and benefits of certain provisions, and that no attempt has even been made to either ensure that or to analyze whether the benefits exceed the costs, which is a fundamental element of effective regulation. The comment period for the proposal ended on August 5, and I will repeat what I have said in the past: if this proposal affects you or your business, I hope that you made your voice heard by submitting a comment to the more than 600-page proposal within the short 90-day comment period."

" On behalf of Inner City Press / Fair Finance Watch, this is a timely comment on the Community Reinvestment Act.    While below we address points from the joint proposal, since CRA is only enforcement on merger and expansion applications, the credibility and transparency of the agencies' enforcement of CRA on merger must be more fulsomely include review of fair lending laws, as well as CRA and negative impacts of recent mergers, from branch closings to raised prices to, yes, layoffs.

      The agencies currently do not sufficient consider "the probable effect of the transaction in meeting the convenience and needs of the community to be served." When the effect of a transaction includes further denuding lower income communities of branches, that is NOT meeting the convenience or needs of these communities.  

  The regulators are far too narrow. One recent example: Fair Finance Watch raised to the FRB and OCC that merger partner MUFG still does business in Russia amid its invasion of Ukraine. This is clearly risky (as well as immoral) and yet the Fed and OCC have not even asked MUFG or its proposed partner about it.  

 Also, employees are clearly "stakeholders" - yet the Federal Reserve had a footnote implying that no level of job loss is relevant to it in reviewing a merger. The CFPB should be consulted, as should legal data bases of discrimination cases. It must be made easier for the impacted public to comment, and to get copies of the regulators questions to the banks, and the banks answers.   The HHI understates the anticompetitive effects of recent mergers, with small banks being considered competitors to the Top Ten. More public comments, and more public hearings, are needed.   

  The agencies rubber stamp nearly all mergers. The bottom line is, some transactions should be denied. For example, when Investors Bank with its weak fair lending record got a conditional approval from the FDIC, it should have been a denial. The Federal Reserve absurdly allows Reserve Banks, which have no power to deny, to approve applications even by banks with rare Needs to Improve CRA ratings (Berkshire Bank).    As NCRC members, we join in NCRC's comments, including that CRA must explicitly consider bank activity by race and ethnicity... The agencies must improve their FOIA responsiveness and compliance, too.   Matthew R. Lee, Esq., Executive Director Fair Finance Watch / Inner City Press

No live questions were taken by the Federal Reserve Bank of New York when it talked, one-way, about the CRA this month.

"This virtual event is intended for banks, consumer and community organizations, CRA stakeholders, and the general public. Selected questions submitted upon registration will be addressed during the event. There will not be live questions."

  Inner City Press asked them, "Why was it decided by the FRBNY that "there will be no live questions"? Who decided it?"

  On July 12, after the event, a "Corporate Communication Associate" at the FRBNY who demanded to not be named emailed back an answer labeled "off the record." Is this any way for a public institution to respond? Except, the Federal Reserve Banks are NOT public institution. Then why do they have a role in setting policy (like CRA) and approving bank mergers? We'll have more on this.



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