First Internet Bank Georgia Bid Hit By 1st CRA Protest of 2022 by Fair Finance Watch

First
Internet Bank Georgia Bid Hit By 1st CRA
Protest of 2022 by Fair Finance Watch

By Matthew
Russell Lee,
Patreon Story
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FEDERAL COURT / S
Bronx, Jan 2 – Whether or not
the U.S. Community
Reinvestment Act will be again
enforced until the new
Administration and its
regulators remains an open
question.

   Now
as the first CRA challenge of
2022, Fair Finance Watch with
Inner City Press on the FOIA
has filed comments with the
Federal Reserve against First
Internet Bank: “This is a
request for a full copy of,
and a timely first comment on,
the Applications of First
Internet Bancorp to acquire
First Century Bancorp and
First Century Bank, N.A.,
Commerce, Georgia. 

Fair Finance
Watch has been tracking First
Internet Bank, and has found
its lending patterns
troubling.  First
Internet Bank in 2020 based on
its disparate marketing made
2114 mortgage loans to whites,
with only 178 denials to
whites — while making only 66
loans to African Americans,
and denying 21 applications
from African Americans. FIB
essential denies African
Americans three times more
frequently than whites – worse
that the rest of the industry
– and makes a far smaller
percentage of its loans to
African Americans than other
banks, particularly those
based in Indiana (or
Georgia). 

This application
should be denied, and a
referral made to the Justice
Department, as the Fed did far
too late on Cadence Bank,
whose lesser disparities Inner
City Press similarly raised to
the Fed.   
Public evidentiary hearings
are needed – including on
First Internet Bank’s “tax
product lending.”

And on this,
timely entered into the
record: 
“07/31/2019  Gave them
all my personal info for a
mortgage loan and received no
call back tried to contact
them to no avail. Scared it
was a scam to get my info.
They were recommended by
credit karma. They have my
fathers info also. They
guaranteed they would get this
done. Complaint Type: Problems
with Product/Service Status:
Answered 03/13/2019  I
have attempted to contact
someone at this office
countless times via phone
call, email and chat, I have
been unsuccessful in finding
out the reason this bank has
decided to lock my account and
HOLD MY FUNDs WITHOUT
INFORMING ME… 

FFW and Inner
City Press have been deeply
concerned about the rush by
the Federal Reserve’s to
rubber-stamp mergers by
redliners 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.”

First came the
news that the Biden
Administration had nominated
Saule Omarova to head the
Office of the Comptroller of
the Currency. While described
as “anti big bank” – good –
Inner City Press and others
asked, What are her views on
CRA, and how would she
approach, and deny some,
mergers? This got lost in the
comrade talk. Now her
nomination is over, with
Omarova pulling the plug after
opposition by Sens. Jon Tester
(D-Mont.) Mark Warner (D-Va.)
Kyrsten Sinema (D-Ariz.), John
Hickenlooper (D-Colo.) and
Mark Kelly (D-Ariz.). So who’s
next?

sdny

Meanwhile the
proposed acquisition by South
State of Atlantic Capital Bank
in Georgia remains a litmus
test. South State is so
disparate that in South
Carolina in 2020 for mortgage
loans to African Americans it
had more denials (147) than
loans made (133) – while
making six loans to whites for
every denial to a white
applicant.

On August 17,
Fair Finance Watch and Inner
City Press on the FOIA) filed
a comment with the Federal
Reserve Board, below.

On September 4,
Fair Finance Watch commented
to the Office of the
Comptroller Currency, which
some say has changed for the
better. We’ll see – now on
September 7, South State has
written to Fair Finance Watch,
cc-ing the OCC and Fed: “Dear
Mr. Lee… In the matter
regarding the concerns of the
Bank’s disparate marketing,
the Bank is committed to
providing equal access to
credit throughout our
footprint. The Bank takes a
multi-layered approach to
ensure that marketing of
credit products reach all
communities within the Bank’s
Assessment Area and each
application is underwritten
without consideration of a
prohibited basis. The Bank has
undergone reviews by
independent audit firms with
reports dated June 30, 2020
and June 30, 2019 where
marketing efforts have been
reviewed. The reviews did not
yield any fair lending
concerns.”

Then something is
very wrong with those audits.

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.

Dear Chair
Powell, Secretary Misback and
others in the FRS:  
This is  a timely first
comment opposing the
Applications of South State
Corporation to merge with
Atlantic Capital Bancshares,
Inc., and thereby indirectly
acquire Atlantic Capital Bank,
NA .

 Fair
Finance Watch has been
tracking South State Bank
NA:  The applicant’s
South State Bank NA in 2020 in
Florida based on its disparate
marketing made 5721 mortgage
loans to whites, with 1019
denials to whites — while
making only 143 loans to
African Americans, with 48
denials. This is far out of
keeping with the demographics,
and other lenders, in Florida
– this is outrageous. 

This is a
pattern. South State Bank NA
in 2020 in South Carolina
based on its disparate
marketing made 3048 mortgage
loans to whites, with 537
denials to whites — while
making only 133 loans to
African Americans, with fully
147 denials. This is far out
of keeping with the
demographics, and other
lenders, in South Carolina.
The denials to African
Americans are…
outrageous.   

Perhaps most
relevant, South State is
disparate in the state it is
trying to make this
acquisition to impose and
expand its practices. South
State Bank NA in 2020 in
Georgia based on its disparate
marketing made 4068 mortgage
loans to whites, with 451
denials to whites — while
making only 494 loans to
African Americans, with 120
denials. This is far out of
keeping with the demographics,
and other lenders, in Georgia
– this is outrageous.

 The comment
period should be extended;
evidentiary hearings should be
held; and on the current
record, the application should
not be approved.

 Inner City
Press (and Fair Finance Watch,
on the HMDA) will have more to
say about this. Watch this
site.

***

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